PE 10

View Financial Glossary Index

Definition

PE 10 is the current stock price divided by the average of the last 10 years' earnings per share.

Metrics of this nature were originally popularized by Benjamin Graham, often called the father of value investing. He used this measurement because it is less sensitive to short term economic fluctuations or accounting distortions which can affect a single year's earnings and PE ratio.

Hence, for stable businesses with long histories, PE 10 gives a better picture of price relative to historical earning power than a standard 1 year PE ratio.

Formula

PE 10 = Price / Average of last 10 Years Earnings Per Share

YCharts uses the annualized average of the last 40 quarters of earnings per share in the denominator. Mathematically:

Average of last 10 years Earnings Per Share = (Quarterly EPSt + Quarterly EPSt-1 + . . . + Quarterly EPSt-39) / 40

Are you an investing professional?

Click here to request a live demo of YCharts Professional, our premium suite of tools and data.
Learn more about our professional products. Call 866-965-7552 or email sales@ycharts.com

Search the Glossary

Advertisement

{{root.upsell.info.feature_headline}}.
Upgrade to {{root.upsell.info.tier_name}}. Start your {{root.upsell.info.tier_name}} Membership

{{root.upsell.info.feature_description}}

{{root.upsell.info.is_upgrade ? "Upgrade Now" : "Start My Free Trial"}}

Already a {{root.upsell.info.tier_name}} Member? Sign in here.