Common Stock Valuation Ratios (Price Multiples)
Difficulty: Beginner
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
Charter Communications Inc., current price multiples
| Charter Communications Inc. | Comcast Corp. | Time Warner Inc. | Twenty-First Century Fox Inc. | Walt Disney Co. | Media | Consumer Services | |
|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||
| Current share price (P) | $ 268.43 | ||||||
| No. shares of common stock outstanding | 237,463,450 | ||||||
| Growth rate (g) | 132.37% | ||||||
| Earnings per share (EPS) | $ 41.67 | ||||||
| Next year expected EPS | $ 96.83 | ||||||
| Operating profit per share | $ 17.29 | ||||||
| Sales per share | $ 175.10 | ||||||
| Book value per share (BVPS) | $ 164.59 | ||||||
| Ratios (Price Multiples) | |||||||
| Price to earnings (P/E) | 6.44 | 6.43 | 14.05 | 24.43 | 16.95 | 10.20 | 24.55 |
| Price to next year expected earnings | 2.77 | 5.63 | 12.72 | 19.89 | 14.97 | 8.97 | 21.41 |
| Price-earnings-growth (PEG) | 0.05 | 0.45 | 1.34 | 1.07 | 1.28 | 0.75 | 1.68 |
| Price to operating profit (P/OP) | 15.52 | 8.12 | 9.31 | 11.56 | 11.05 | 10.15 | 17.67 |
| Price to sales (P/S) | 1.53 | 1.73 | 2.36 | 2.53 | 2.76 | 2.11 | 1.57 |
| Price to book value (P/BV) | 1.63 | 2.13 | 2.60 | 4.59 | 3.68 | 2.63 | 6.13 |
If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.
Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.
Historical Valuation Ratios (Summary)
Charter Communications Inc., historical price multiples
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| | Price to earnings (P/E) | 9.34 | 24.77 | – | – | – |
| | Price to operating profit (P/OP) | 22.51 | 35.52 | 16.26 | 20.50 | 14.61 |
| | Price to sales (P/S) | 2.22 | 3.01 | 1.86 | 2.19 | 1.63 |
| | Price to book value (P/BV) | 2.36 | 2.17 | – | 136.37 | 87.92 |
| 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. | Charter Communications Inc.'s P/E ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level. |
| 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. | Charter Communications Inc.'s P/OP ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level. |
| 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. | Charter Communications Inc.'s P/S ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level. |
| P/BV ratio | The P/BV ratio is interpreted as an indicator of market judgment about the relationship between a company's required rate of return and its actual rate of return. | Charter Communications Inc.'s P/BV ratio increased from 2015 to 2016 and from 2016 to 2017. |
Price to Earnings (P/E)
Charter Communications Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 238,506,060 | 268,897,793 | 112,438,828 | 111,999,687 | 106,144,075 | |
| Selected Financial Data (USD $) | ||||||
| | Net income (loss) attributable to Charter shareholders (in millions) | 9,895 | 3,522 | (271) | (183) | (169) |
| | Earnings per share (EPS)3 | 41.49 | 13.10 | -2.41 | -1.63 | -1.59 |
| Share price1, 2 | 387.50 | 324.46 | 161.08 | 177.77 | 125.08 | |
| Ratio | ||||||
| | P/E ratio4 | 9.34 | 24.77 | – | – | – |
| Benchmarks | ||||||
| P/E Ratio, Competitors | ||||||
| Comcast Corp. | 8.70 | 20.56 | 17.78 | 18.01 | 21.12 | |
| Time Warner Inc. | 14.03 | 19.14 | 13.74 | 17.89 | 15.65 | |
| Twenty-First Century Fox Inc. | 17.69 | 17.69 | 7.32 | 17.35 | 10.23 | |
| Walt Disney Co. | 17.28 | 16.65 | 23.41 | 20.31 | 19.83 | |
| P/E Ratio, Sector | ||||||
| Media | 11.47 | 19.31 | 16.64 | 19.55 | 17.36 | |
| P/E Ratio, Industry | ||||||
| Consumer Services | 23.26 | 22.79 | 23.36 | 24.03 | 19.17 | |
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Charter Communications Inc.'s Annual Report.
2017 Calculations
3 EPS = Net income (loss) attributable to Charter shareholders ÷ No. shares of common stock outstanding
= 9,895,000,000 ÷ 238,506,060 = 41.49
4 P/E ratio = Share price ÷ EPS
= 387.50 ÷ 41.49 = 9.34
| 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. | Charter Communications Inc.'s P/E ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level. |
Price to Operating Profit (P/OP)
Charter Communications Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 238,506,060 | 268,897,793 | 112,438,828 | 111,999,687 | 106,144,075 | |
| Selected Financial Data (USD $) | ||||||
| | Income from operations (in millions) | 4,106 | 2,456 | 1,114 | 971 | 909 |
| | Operating profit per share3 | 17.22 | 9.13 | 9.91 | 8.67 | 8.56 |
| Share price1, 2 | 387.50 | 324.46 | 161.08 | 177.77 | 125.08 | |
| Ratio | ||||||
| | P/OP ratio4 | 22.51 | 35.52 | 16.26 | 20.50 | 14.61 |
| Benchmarks | ||||||
| P/OP Ratio, Competitors | ||||||
| Comcast Corp. | 10.98 | 10.61 | 9.07 | 10.12 | 10.62 | |
| Time Warner Inc. | 9.29 | 9.96 | 7.67 | 11.46 | 8.74 | |
| Twenty-First Century Fox Inc. | 8.37 | 8.59 | 10.30 | 14.27 | 13.51 | |
| Walt Disney Co. | 11.26 | 11.01 | 14.90 | 13.36 | 13.17 | |
| P/OP Ratio, Sector | ||||||
| Media | 11.41 | 11.69 | 10.98 | 12.13 | 11.47 | |
| P/OP Ratio, Industry | ||||||
| Consumer Services | 16.74 | 14.68 | 14.07 | 13.77 | 13.49 | |
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Charter Communications Inc.'s Annual Report.
2017 Calculations
3 Operating profit per share = Income from operations ÷ No. shares of common stock outstanding
= 4,106,000,000 ÷ 238,506,060 = 17.22
4 P/OP ratio = Share price ÷ Operating profit per share
= 387.50 ÷ 17.22 = 22.51
| 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. | Charter Communications Inc.'s P/OP ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level. |
Price to Sales (P/S)
Charter Communications Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 238,506,060 | 268,897,793 | 112,438,828 | 111,999,687 | 106,144,075 | |
| Selected Financial Data (USD $) | ||||||
| | Revenues (in millions) | 41,581 | 29,003 | 9,754 | 9,108 | 8,155 |
| | Sales per share3 | 174.34 | 107.86 | 86.75 | 81.32 | 76.83 |
| Share price1, 2 | 387.50 | 324.46 | 161.08 | 177.77 | 125.08 | |
| Ratio | ||||||
| | P/S ratio4 | 2.22 | 3.01 | 1.86 | 2.19 | 1.63 |
| Benchmarks | ||||||
| P/S Ratio, Competitors | ||||||
| Comcast Corp. | 2.34 | 2.22 | 1.95 | 2.19 | 2.23 | |
| Time Warner Inc. | 2.35 | 2.56 | 1.87 | 2.50 | 1.94 | |
| Twenty-First Century Fox Inc. | 1.83 | 1.78 | 2.10 | 2.46 | 2.62 | |
| Walt Disney Co. | 2.81 | 2.81 | 3.74 | 3.12 | 2.70 | |
| P/S Ratio, Sector | ||||||
| Media | 2.37 | 2.46 | 2.44 | 2.53 | 2.33 | |
| P/S Ratio, Industry | ||||||
| Consumer Services | 1.49 | 1.32 | 1.29 | 1.19 | 1.17 | |
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Charter Communications Inc.'s Annual Report.
2017 Calculations
3 Sales per share = Revenues ÷ No. shares of common stock outstanding
= 41,581,000,000 ÷ 238,506,060 = 174.34
4 P/S ratio = Share price ÷ Sales per share
= 387.50 ÷ 174.34 = 2.22
| 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. | Charter Communications Inc.'s P/S ratio increased from 2015 to 2016 but then slightly declined from 2016 to 2017 not reaching 2015 level. |
Price to Book Value (P/BV)
Charter Communications Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 238,506,060 | 268,897,793 | 112,438,828 | 111,999,687 | 106,144,075 | |
| Selected Financial Data (USD $) | ||||||
| | Total Charter shareholders' equity (deficit) (in millions) | 39,084 | 40,139 | (46) | 146 | 151 |
| | Book value per share (BVPS)3 | 163.87 | 149.27 | -0.41 | 1.30 | 1.42 |
| Share price1, 2 | 387.50 | 324.46 | 161.08 | 177.77 | 125.08 | |
| Ratio | ||||||
| | P/BV ratio4 | 2.36 | 2.17 | – | 136.37 | 87.92 |
| Benchmarks | ||||||
| P/BV Ratio, Competitors | ||||||
| Comcast Corp. | 2.88 | 3.31 | 2.78 | 2.86 | 2.84 | |
| Time Warner Inc. | 2.59 | 3.09 | 2.23 | 2.80 | 1.93 | |
| Twenty-First Century Fox Inc. | 3.32 | 3.57 | 3.53 | 4.50 | 4.27 | |
| Walt Disney Co. | 3.76 | 3.61 | 4.41 | 3.39 | 2.68 | |
| P/BV Ratio, Sector | ||||||
| Media | 2.96 | 3.12 | 3.44 | 3.36 | 2.86 | |
| P/BV Ratio, Industry | ||||||
| Consumer Services | 5.81 | 5.02 | 5.07 | 4.31 | 3.86 | |
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Charter Communications Inc.'s Annual Report.
2017 Calculations
3 BVPS = Total Charter shareholders' equity (deficit) ÷ No. shares of common stock outstanding
= 39,084,000,000 ÷ 238,506,060 = 163.87
4 P/BV ratio = Share price ÷ BVPS
= 387.50 ÷ 163.87 = 2.36
| 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's required rate of return and its actual rate of return. | Charter Communications Inc.'s P/BV ratio increased from 2015 to 2016 and from 2016 to 2017. |