Price to Operating Profit (P/OP)
since 2005
Calculation
Steel Dynamics Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income (loss)1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 28, 2022 | 3.14 | = | 70.58 | ÷ | 22.48 | 22.48 | = | 4,301,105 | ÷ | 191,299,162 | |
| Mar 1, 2021 | 10.96 | = | 44.01 | ÷ | 4.01 | 4.01 | = | 847,142 | ÷ | 211,005,100 | |
| Feb 27, 2020 | 5.82 | = | 26.89 | ÷ | 4.62 | 4.62 | = | 986,880 | ÷ | 213,554,449 | |
| Feb 27, 2019 | 4.94 | = | 37.95 | ÷ | 7.69 | 7.69 | = | 1,722,409 | ÷ | 224,105,246 | |
| Feb 27, 2018 | 10.51 | = | 47.51 | ÷ | 4.52 | 4.52 | = | 1,066,881 | ÷ | 236,071,369 | |
| Feb 28, 2017 | 12.18 | = | 36.60 | ÷ | 3.00 | 3.00 | = | 727,966 | ÷ | 242,349,757 | |
| Feb 26, 2016 | — | = | 18.11 | ÷ | -0.30 | -0.30 | = | -72,784 | ÷ | 243,186,659 | |
| Mar 2, 2015 | 13.62 | = | 18.06 | ÷ | 1.33 | 1.33 | = | 320,320 | ÷ | 241,529,877 | |
| Mar 3, 2014 | 9.93 | = | 17.21 | ÷ | 1.73 | 1.73 | = | 386,525 | ÷ | 223,004,874 | |
| Feb 27, 2013 | 8.50 | = | 15.11 | ÷ | 1.78 | 1.78 | = | 391,165 | ÷ | 220,114,512 | |
| Feb 27, 2012 | 5.57 | = | 14.86 | ÷ | 2.67 | 2.67 | = | 584,820 | ÷ | 219,035,240 | |
| Feb 23, 2011 | 11.07 | = | 18.53 | ÷ | 1.67 | 1.67 | = | 364,753 | ÷ | 217,929,783 | |
| Feb 22, 2010 | 30.41 | = | 16.80 | ÷ | 0.55 | 0.55 | = | 119,531 | ÷ | 216,333,971 | |
| Feb 27, 2009 | 1.78 | = | 8.35 | ÷ | 4.70 | 4.70 | = | 855,240 | ÷ | 181,993,610 | |
| Feb 27, 2008 | 8.25 | = | 30.23 | ÷ | 3.67 | 3.67 | = | 691,154 | ÷ | 188,563,492 | |
| Feb 26, 2007 | 5.90 | = | 20.07 | ÷ | 3.40 | 3.40 | = | 659,114 | ÷ | 193,879,742 | |
| Mar 9, 2006 | 5.13 | = | 11.56 | ÷ | 2.25 | 2.25 | = | 393,175 | ÷ | 174,576,248 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Steel Dynamics Inc. Annual Report.
The Price to Operating Profit (P/OP) ratio exhibits significant volatility over the analyzed period, reflecting a lack of linear correlation between equity valuation and operational profitability. The ratio is characterized by periodic extremes, suggesting that market sentiment often diverges from immediate operating results.
- Valuation Extremes and Volatility
- The most pronounced fluctuation occurred between 2009 and 2010. In 2009, the P/OP ratio dropped to a historical low of 1.78, as the share price declined sharply despite relatively strong operating profit per share. Conversely, the ratio spiked to 30.41 in 2010, driven by a sharp contraction in operating profit per share to 0.55 while the share price began to recover.
- Mid-Term Valuation Expansion
- Between 2011 and 2015, a general upward trend in the P/OP ratio is observed, peaking at 13.62. This period indicates a market willingness to pay a higher premium for each unit of operating profit. This trend reversed between 2017 and 2019, where the ratio declined to 4.94 as operating profit per share grew significantly faster than the share price.
- Recent Profitability Surge and Ratio Compression
- The data concludes with a period of substantial operational growth. While the share price reached a historical high of 70.58 in 2022, the operating profit per share experienced an unprecedented increase to 22.48. This massive surge in operational efficiency resulted in a compression of the P/OP ratio to 3.14, indicating that the growth in earnings significantly outpaced the growth in market valuation.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Comparison to Competitors
Steel Dynamics Inc., P/OP, long-term trends, comparison to competitors
| Steel Dynamics Inc. | Freeport-McMoRan Inc. | |
|---|---|---|
| Feb 28, 2022 | 3.14 | 7.59 |
| Mar 1, 2021 | 10.96 | 19.69 |
| Feb 27, 2020 | 5.82 | 16.28 |
| Feb 27, 2019 | 4.94 | 3.74 |
| Feb 27, 2018 | 10.51 | 7.34 |
| Feb 28, 2017 | 12.18 | — |
| Feb 26, 2016 | — | — |
| Mar 2, 2015 | 13.62 | 231.88 |
| Mar 3, 2014 | 9.93 | 6.50 |
| Feb 27, 2013 | 8.50 | 5.30 |
| Feb 27, 2012 | 5.57 | 4.49 |
| Feb 23, 2011 | 11.07 | 5.47 |
| Feb 22, 2010 | 30.41 | 4.98 |
| Feb 27, 2009 | 1.78 | — |
| Feb 27, 2008 | 8.25 | 5.89 |
| Feb 26, 2007 | 5.90 | 3.95 |
| Mar 9, 2006 | 5.13 | 4.61 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).