Common Stock Valuation Ratios (Price Multiples)
Valuation ratios measure the quantity of an asset or flaw (e.g., earnings) associated with ownership of a specified claim (e.g., a share of ownership of the enterprise).
Current Valuation Ratios
McKesson Corp., current price multiples
| McKesson Corp. | Abbott Laboratories | Cigna Group | CVS Health Corp. | Elevance Health Inc. | Humana Inc. | Intuitive Surgical Inc. | Medtronic PLC | Shockwave Medical Inc. | UnitedHealth Group Inc. | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||
| Current share price (P) | $160.50 | ||||||||||
| No. shares of common stock outstanding | 226,086,960 | ||||||||||
| Growth rate (g) | 17.08% | ||||||||||
| Earnings per share (EPS) | $9.99 | ||||||||||
| Next year expected EPS | $11.69 | ||||||||||
| Operating profit per share | $15.68 | ||||||||||
| Sales per share | $844.29 | ||||||||||
| Book value per share (BVPS) | $39.47 | ||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||
| Price to earnings (P/E) | 16.07 | 32.20 | 18.95 | 8.30 | 20.40 | 15.54 | 74.50 | 28.59 | 83.79 | 20.31 | |
| Price to next year expected earnings | 13.73 | 30.13 | 17.02 | 7.82 | 18.14 | 13.23 | 65.64 | 28.02 | 107.05 | 17.32 | |
| Price-earnings-growth (PEG) | 0.94 | 4.69 | 1.67 | 1.36 | 1.63 | 0.89 | 5.52 | 13.97 | — | 1.18 | |
| Price to operating profit (P/OP) | 10.24 | 28.44 | 11.46 | 5.04 | 16.04 | 9.64 | 75.82 | 19.59 | 77.57 | 14.05 | |
| Price to sales (P/S) | 0.19 | 4.59 | 0.50 | 0.19 | 0.72 | 0.37 | 18.80 | 3.44 | 16.90 | 1.24 | |
| Price to book value (P/BV) | 4.07 | 4.77 | 2.12 | 0.91 | 3.11 | 2.38 | 10.07 | 2.09 | 18.46 | 5.12 | |
Based on: 10-K (reporting date: 2016-03-31).
If the company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if the company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
McKesson Corp., historical price multiples
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
| Valuation ratio | Description | The company |
|---|---|---|
| P/E ratio | The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. | McKesson Corp. P/E ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016. |
| P/OP ratio | Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. | McKesson Corp. P/OP ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016. |
| P/S ratio | An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. | McKesson Corp. P/S ratio decreased from 2014 to 2015 and from 2015 to 2016. |
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. | McKesson Corp. P/BV ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016. |
Price to Earnings (P/E)
McKesson Corp., historical P/E calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 225,020,523 | 231,553,531 | 230,576,753 | 226,611,092 | 235,397,188 | 252,120,037 | |
| Selected Financial Data (US$) | |||||||
| Net income attributable to McKesson Corporation (in millions) | 2,258) | 1,476) | 1,263) | 1,338) | 1,403) | 1,202) | |
| Earnings per share (EPS)2 | 10.03 | 6.37 | 5.48 | 5.90 | 5.96 | 4.77 | |
| Share price1, 3 | 172.70 | 229.55 | 178.20 | 108.63 | 90.17 | 82.84 | |
| Valuation Ratio | |||||||
| P/E ratio4 | 17.21 | 36.01 | 32.53 | 18.40 | 15.13 | 17.38 | |
| Benchmarks | |||||||
| P/E Ratio, Competitors5 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| Shockwave Medical Inc. | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
EPS = Net income attributable to McKesson Corporation ÷ No. shares of common stock outstanding
= 2,258,000,000 ÷ 225,020,523 = 10.03
3 Closing price as at the filing date of McKesson Corp. Annual Report.
4 2016 Calculation
P/E ratio = Share price ÷ EPS
= 172.70 ÷ 10.03 = 17.21
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/E ratio | The P/E ratio tells analyst how much an investor in common stock pays per dollar of current earnings. | McKesson Corp. P/E ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016. |
Price to Operating Profit (P/OP)
McKesson Corp., historical P/OP calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 225,020,523 | 231,553,531 | 230,576,753 | 226,611,092 | 235,397,188 | 252,120,037 | |
| Selected Financial Data (US$) | |||||||
| Operating income (in millions) | 3,545) | 2,968) | 2,367) | 2,315) | 2,149) | 1,821) | |
| Operating profit per share2 | 15.75 | 12.82 | 10.27 | 10.22 | 9.13 | 7.22 | |
| Share price1, 3 | 172.70 | 229.55 | 178.20 | 108.63 | 90.17 | 82.84 | |
| Valuation Ratio | |||||||
| P/OP ratio4 | 10.96 | 17.91 | 17.36 | 10.63 | 9.88 | 11.47 | |
| Benchmarks | |||||||
| P/OP Ratio, Competitors5 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| Shockwave Medical Inc. | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 3,545,000,000 ÷ 225,020,523 = 15.75
3 Closing price as at the filing date of McKesson Corp. Annual Report.
4 2016 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 172.70 ÷ 15.75 = 10.96
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/OP ratio | Because P/E ratio is calculated using net income, the ratio can be sensitive to nonrecurring earnings and capital structure, analysts may use price to operating profit. | McKesson Corp. P/OP ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016. |
Price to Sales (P/S)
McKesson Corp., historical P/S calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 225,020,523 | 231,553,531 | 230,576,753 | 226,611,092 | 235,397,188 | 252,120,037 | |
| Selected Financial Data (US$) | |||||||
| Revenues (in millions) | 190,884) | 179,045) | 137,609) | 122,455) | 122,734) | 112,084) | |
| Sales per share2 | 848.30 | 773.23 | 596.80 | 540.38 | 521.39 | 444.57 | |
| Share price1, 3 | 172.70 | 229.55 | 178.20 | 108.63 | 90.17 | 82.84 | |
| Valuation Ratio | |||||||
| P/S ratio4 | 0.20 | 0.30 | 0.30 | 0.20 | 0.17 | 0.19 | |
| Benchmarks | |||||||
| P/S Ratio, Competitors5 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| Shockwave Medical Inc. | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
Sales per share = Revenues ÷ No. shares of common stock outstanding
= 190,884,000,000 ÷ 225,020,523 = 848.30
3 Closing price as at the filing date of McKesson Corp. Annual Report.
4 2016 Calculation
P/S ratio = Share price ÷ Sales per share
= 172.70 ÷ 848.30 = 0.20
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/S ratio | An rationale for the P/S ratio is that sales, as the top line in an income statement, are generally less subject to distortion or manipulation than other fundamentals such as EPS or book value. Sales are also more stable than earnings and never negative. | McKesson Corp. P/S ratio decreased from 2014 to 2015 and from 2015 to 2016. |
Price to Book Value (P/BV)
McKesson Corp., historical P/BV calculation, comparison to benchmarks
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 225,020,523 | 231,553,531 | 230,576,753 | 226,611,092 | 235,397,188 | 252,120,037 | |
| Selected Financial Data (US$) | |||||||
| Total McKesson Corporation stockholders’ equity (in millions) | 8,924) | 8,001) | 8,522) | 7,070) | 6,831) | 7,220) | |
| Book value per share (BVPS)2 | 39.66 | 34.55 | 36.96 | 31.20 | 29.02 | 28.64 | |
| Share price1, 3 | 172.70 | 229.55 | 178.20 | 108.63 | 90.17 | 82.84 | |
| Valuation Ratio | |||||||
| P/BV ratio4 | 4.35 | 6.64 | 4.82 | 3.48 | 3.11 | 2.89 | |
| Benchmarks | |||||||
| P/BV Ratio, Competitors5 | |||||||
| Abbott Laboratories | — | — | — | — | — | — | |
| Cigna Group | — | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | — | |
| Humana Inc. | — | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | — | |
| Shockwave Medical Inc. | — | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
BVPS = Total McKesson Corporation stockholders’ equity ÷ No. shares of common stock outstanding
= 8,924,000,000 ÷ 225,020,523 = 39.66
3 Closing price as at the filing date of McKesson Corp. Annual Report.
4 2016 Calculation
P/BV ratio = Share price ÷ BVPS
= 172.70 ÷ 39.66 = 4.35
5 Click competitor name to see calculations.
| Valuation ratio | Description | The company |
|---|---|---|
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company required rate of return and its actual rate of return. | McKesson Corp. P/BV ratio increased from 2014 to 2015 but then decreased significantly from 2015 to 2016. |