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).
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3M Co. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
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Current Valuation Ratios
3M Co., current price multiples
| 3M Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | |||||||||||||
| No. shares of common stock outstanding | |||||||||||||
| Growth rate (g) | |||||||||||||
| Earnings per share (EPS) | |||||||||||||
| Next year expected EPS | |||||||||||||
| Operating profit per share | |||||||||||||
| Sales per share | |||||||||||||
| Book value per share (BVPS) | |||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | |||||||||||||
| Price to next year expected earnings | |||||||||||||
| Price-earnings-growth (PEG) | |||||||||||||
| Price to operating profit (P/OP) | |||||||||||||
| Price to sales (P/S) | |||||||||||||
| Price to book value (P/BV) | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
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)
3M Co., historical price multiples
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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).
- Price to Earnings (P/E) Ratio
- The price to earnings ratio shows a consistent downward trend over the analyzed period, declining from 27.32 in 2017 to 15.78 in 2021. This steady decrease indicates that the market valuation relative to earnings has been compressing, potentially reflecting either a reduction in investor expectations, an improvement in earnings, or a combination of both.
- Price to Operating Profit (P/OP) Ratio
- This ratio also exhibits a clear decreasing pattern, moving from 16.97 in 2017 to 12.68 in 2021. The decline suggests that the stock's trading price has diminished relative to the operating profit, highlighting improved operating efficiency or lower market valuation multiples applied to operating income.
- Price to Sales (P/S) Ratio
- The price to sales ratio decreased from 4.19 in 2017 to 2.64 in 2021, albeit with a slight uptick in 2020 to 3.19. This fluctuation could imply variability in market perception of sales growth or profitability margins. The general downward movement indicates a reduced valuation based on sales figures over the period.
- Price to Book Value (P/BV) Ratio
- The price to book value ratio declined markedly from 11.48 in 2017 to 6.21 in 2021, illustrating a significant reduction in market price relative to the company's net asset value. This substantial drop may be suggestive of decreasing market confidence in the company's asset base or a broader adjustment in valuation metrics towards book value.
Price to Earnings (P/E)
3M Co., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income attributable to 3M (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/E Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/E Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income attributable to 3M ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a declining trend over the five-year period, decreasing from $222.89 at the end of 2017 to $163.64 by the end of 2021. Notably, there was a significant drop between 2018 and 2019, followed by a modest increase in 2020, and another decline in 2021.
- Earnings per Share (EPS)
- The EPS showed fluctuations but generally an increasing trend. Starting at $8.16 in 2017, it reached a peak of $10.37 in 2021. After a rise in 2018, EPS dipped in 2019, recovered in 2020, and continued to grow in 2021, indicating improving profitability towards the end of the period.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio consistently decreased from 27.32 in 2017 to 15.78 in 2021. This decline suggests that the market valued earnings at a lower multiple over time, which may reflect changing market perceptions or expectations about growth prospects or risk associated with the company’s shares.
- Overall Insights
- Despite the rise in earnings per share, the share price declined over the period, contributing to the reduced P/E ratio. This combination indicates that while the company improved its profitability, market sentiment or other external factors might have exerted downward pressure on its stock valuation. The divergence between improving earnings and declining share price could imply increased caution among investors or broader market conditions influencing the company’s valuation.
Price to Operating Profit (P/OP)
3M Co., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/OP Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/OP Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a declining trend over the period from 2017 to 2021. It decreased from $222.89 at the end of 2017 to $163.64 by the end of 2021, representing a notable reduction. The decline was somewhat erratic, with a drop each year except for an increase from 2019 to 2020 where it rose from $162.89 to $177.10 before falling again in 2021.
- Operating Profit Per Share
- Operating profit per share showed a downward trend from 2017 through 2019, falling from $13.13 to $10.73. However, it recovered somewhat in the subsequent years, increasing to $12.37 in 2020 and slightly higher to $12.90 in 2021. Despite the recovery, the 2021 figure remained below the 2017 level.
- Price-to-Operating Profit Ratio (P/OP)
- The P/OP ratio steadily decreased across the entire period, from 16.97 in 2017 down to 12.68 in 2021. This suggests that the market valuation of operating profits relative to share price diminished over time, potentially reflecting changing market perceptions, valuation adjustments, or improvements in operating profit yielding a lower ratio despite the falling share price.
- Summary Insights
- Overall, the financial data reveals a share price under pressure with significant declines over the five years, partially offset by stabilization and modest growth in operating profit per share after 2019. The progressive decline in the P/OP ratio indicates increasing operating profit relative to share price or a reassessment by investors on the company’s valuation multiples. The divergence between improving operating profit per share in later years and the continuing decrease in share price suggests external or market-based factors affecting investor sentiment independent of operating performance improvements.
Price to Sales (P/S)
3M Co., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net sales (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/S Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/S Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial trends reveals several notable patterns and changes over the five-year period under review.
- Share Price
- The share price exhibited a downward trend overall. Starting at $222.89 in 2017, it declined to $163.64 by the end of 2021. The most significant decrease occurred between 2017 and 2019, with a drop from $222.89 to $162.89. Following that, there was a slight recovery in 2020 to $177.1, before declining again in 2021.
- Sales per Share
- The sales per share showed a generally increasing trend throughout the period. From $53.16 in 2017, it rose steadily to $61.91 in 2021. Although there was a minor decline in 2019 and 2020, the overall trajectory was upward, indicating growth in sales on a per-share basis.
- Price-to-Sales (P/S) Ratio
- The P/S ratio displayed a consistent downward trend from 4.19 in 2017 to 2.64 in 2021. This decline reflects the combined effect of the falling share price and the increasing sales per share. The reduction in the P/S ratio may suggest that the market valuation of sales has decreased over time.
In summary, the share price declined considerably despite an increase in sales per share, leading to a marked decrease in the price-to-sales ratio over the observed period. This pattern may imply changing market perceptions or valuation metrics for the company’s stock relative to its sales performance.
Price to Book Value (P/BV)
3M Co., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total 3M Company shareholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/BV Ratio, Sector | ||||||
| Capital Goods | ||||||
| P/BV Ratio, Industry | ||||||
| Industrials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Total 3M Company shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
The data reflects the performance of certain market and accounting metrics over a five-year period, from 2017 through 2021.
- Share Price
- The share price exhibited a downward trend over the period analyzed. Starting at $222.89 in 2017, it decreased to $199.84 in 2018, fell further to $162.89 by 2019, experienced a slight recovery to $177.10 in 2020, but ultimately declined again to $163.64 in 2021. This indicates overall depreciation in market valuation of the shares over these five years.
- Book Value Per Share (BVPS)
- Contrary to the share price trend, the book value per share showed an upward trajectory, particularly notable from 2019 onwards. Initially, BVPS decreased slightly from $19.42 in 2017 to $17.01 in 2018 but then remained relatively stable at $17.48 in 2019. From 2020 onwards, BVPS increased markedly to $22.22 and further to $26.35 in 2021, suggesting improvement in the company's net asset value per share.
- Price-to-Book Value Ratio (P/BV)
- The price-to-book ratio declined steadily throughout the period. Starting at 11.48 in 2017, it remained slightly higher at 11.75 in 2018 before decreasing significantly each year to 9.32 in 2019, 7.97 in 2020, and reaching 6.21 by 2021. The declining trend indicates that the market price of the shares is falling relative to the company's book value, which could imply increasing market undervaluation or heightened caution among investors.
In summary, while book value per share increased over the most recent years, share price declined, resulting in a decreasing price-to-book ratio. These patterns suggest a divergence between accounting fundamentals and market valuation, possibly reflecting external market conditions, investor sentiment, or company-specific factors impacting perceptions of future performance.