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
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) | $118.50 | ||||||||||||
| No. shares of common stock outstanding | 552,742,915 | ||||||||||||
| Growth rate (g) | 17.04% | ||||||||||||
| Earnings per share (EPS) | $10.71 | ||||||||||||
| Next year expected EPS | $12.54 | ||||||||||||
| Operating profit per share | $13.33 | ||||||||||||
| Sales per share | $63.96 | ||||||||||||
| Book value per share (BVPS) | $27.22 | ||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | 11.06 | 72.33 | 28.65 | 31.09 | 37.37 | 14.48 | 26.53 | 38.46 | 97.35 | 51.35 | |||
| Price to next year expected earnings | 9.45 | 14,115.31 | 21.68 | 28.48 | 36.73 | 12.67 | 19.39 | 37.69 | 96.81 | 48.05 | |||
| Price-earnings-growth (PEG) | 0.65 | — | 0.89 | 3.40 | 21.46 | 1.02 | 0.72 | 18.66 | 173.74 | 7.48 | |||
| Price to operating profit (P/OP) | 8.89 | 31.93 | 22.82 | 24.39 | 29.52 | 12.29 | 17.22 | 27.84 | 39.00 | 32.29 | |||
| Price to sales (P/S) | 1.85 | 1.53 | 3.98 | 4.63 | 7.68 | 1.83 | 1.77 | 2.92 | 3.55 | 2.98 | |||
| Price to book value (P/BV) | 4.35 | 25.06 | 11.94 | 6.54 | 17.41 | 4.93 | 19.80 | 3.97 | 8.11 | 7.84 | |||
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
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).
An analysis of valuation multiples from 2017 to 2021 reveals a consistent downward trend across all primary price-based ratios, indicating a contraction in the market's valuation of the company relative to its fundamental financial metrics.
- Price to Earnings (P/E) and Price to Operating Profit (P/OP)
- Both profit-based multiples experienced a steady and uninterrupted decline over the five-year period. The P/E ratio decreased from 27.32 in 2017 to 15.78 in 2021, while the P/OP ratio followed a similar trajectory, falling from 16.97 to 12.68. This synchronized compression suggests a reduction in the premium investors were willing to pay for each unit of earnings and operating profit.
- Price to Sales (P/S)
- The P/S ratio generally trended downward, moving from 4.19 in 2017 to 2.64 in 2021. A slight deviation from this trend is observed in 2020, where the ratio increased to 3.19 from 2.92 in 2019, before continuing its decline in the final year of the period.
- Price to Book Value (P/BV)
- The P/BV ratio remained relatively stable between 2017 and 2018, peaking at 11.75. Subsequently, a marked downward trend occurred, with the ratio declining to 9.32 in 2019 and reaching 6.21 by 2021, representing a significant contraction in the market value relative to the company's equity base.
The overall pattern across all analyzed ratios indicates a systematic devaluation of the equity relative to earnings, sales, and book value. The simultaneous decline in these multiples reflects a broader trend of valuation compression throughout the analyzed timeframe.
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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 | 571,100,000 | 579,100,000 | 575,600,000 | 575,800,000 | 595,500,000 | |
| Selected Financial Data (US$) | ||||||
| Net income attributable to 3M (in millions) | 5,921) | 5,384) | 4,570) | 5,349) | 4,858) | |
| Earnings per share (EPS)2 | 10.37 | 9.30 | 7.94 | 9.29 | 8.16 | |
| Share price1, 3 | 163.64 | 177.10 | 162.89 | 199.84 | 222.89 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 15.78 | 19.05 | 20.52 | 21.51 | 27.32 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 16.82 | — | — | — | — | |
| Eaton Corp. plc | 27.77 | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | 23.14 | — | — | — | — | |
| Lockheed Martin Corp. | 16.70 | — | — | — | — | |
| RTX Corp. | 36.79 | — | — | — | — | |
| P/E Ratio, Sector | ||||||
| Capital Goods | 57.31 | — | — | — | — | |
| P/E Ratio, Industry | ||||||
| Industrials | 35.59 | — | — | — | — | |
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
= 5,921,000,000 ÷ 571,100,000 = 10.37
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 163.64 ÷ 10.37 = 15.78
5 Click competitor name to see calculations.
A consistent compression of the price-to-earnings (P/E) multiple is observed between 2017 and 2021, indicating a significant shift in market valuation despite an overall increase in earnings per share.
- Price-to-Earnings (P/E) Ratio Trend
- The P/E ratio exhibited a continuous and linear downward trajectory, declining from 27.32 in 2017 to 15.78 by the end of 2021. This steady contraction suggests a diminishing premium that investors were willing to assign to the company's earnings over the five-year period.
- Earnings per Share (EPS) Performance
- Earnings per share demonstrated a general upward trend, increasing from $8.16 in 2017 to $10.37 in 2021. Although a temporary dip to $7.94 occurred in 2019, the subsequent recovery and growth indicate a strengthening of the company's fundamental profitability per share.
- Share Price and Valuation Divergence
- A clear divergence is evident between the company's earning power and its market price. While EPS grew by approximately 27% from 2017 to 2021, the share price fell from $222.89 to $163.64. This pattern confirms that the decline in share price was not caused by a lack of profitability, but rather by a substantial contraction in the valuation multiple applied by the market.
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Price to Operating Profit (P/OP)
3M Co., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 571,100,000 | 579,100,000 | 575,600,000 | 575,800,000 | 595,500,000 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 7,369) | 7,161) | 6,174) | 7,207) | 7,820) | |
| Operating profit per share2 | 12.90 | 12.37 | 10.73 | 12.52 | 13.13 | |
| Share price1, 3 | 163.64 | 177.10 | 162.89 | 199.84 | 222.89 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 12.68 | 14.32 | 15.19 | 15.97 | 16.97 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 15.87 | — | — | — | — | |
| Eaton Corp. plc | 19.33 | — | — | — | — | |
| GE Aerospace | 17.46 | — | — | — | — | |
| Honeywell International Inc. | 20.68 | — | — | — | — | |
| Lockheed Martin Corp. | 11.56 | — | — | — | — | |
| RTX Corp. | 28.68 | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Capital Goods | 22.96 | — | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Industrials | 22.38 | — | — | — | — | |
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
= 7,369,000,000 ÷ 571,100,000 = 12.90
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
= 163.64 ÷ 12.90 = 12.68
5 Click competitor name to see calculations.
The valuation metrics from 2017 to 2021 reveal a sustained compression in the price-to-operating profit multiple despite relative stability in underlying operational profitability.
- Share Price Performance
- The share price experienced a general downward trajectory over the five-year period, decreasing from US$ 222.89 in 2017 to US$ 163.64 in 2021. Although a temporary increase occurred in 2020, the overall trend indicates a significant reduction in the market's valuation of the equity.
- Operating Profit per Share
- Operating profit per share remained relatively resilient, starting at US$ 13.13 in 2017 and concluding at US$ 12.90 in 2021. A notable dip was recorded in 2019, where profit fell to US$ 10.73, followed by a recovery in 2020 and 2021, suggesting that core operational earnings capacity remained largely stable over the long term.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio exhibited a consistent and uninterrupted year-over-year decline, falling from 16.97 in 2017 to 12.68 in 2021. This steady contraction indicates that the market assigned a lower multiple to each dollar of operating profit as time progressed, reflecting a decrease in valuation premiums.
The divergence between the recovery in operating profit per share and the continued decline in the P/OP ratio suggests that the decrease in share price was driven primarily by multiple contraction rather than a fundamental deterioration in operational performance.
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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 | 571,100,000 | 579,100,000 | 575,600,000 | 575,800,000 | 595,500,000 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in millions) | 35,355) | 32,184) | 32,136) | 32,765) | 31,657) | |
| Sales per share2 | 61.91 | 55.58 | 55.83 | 56.90 | 53.16 | |
| Share price1, 3 | 163.64 | 177.10 | 162.89 | 199.84 | 222.89 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 2.64 | 3.19 | 2.92 | 3.51 | 4.19 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | 1.87 | — | — | — | — | |
| Caterpillar Inc. | 2.26 | — | — | — | — | |
| Eaton Corp. plc | 3.03 | — | — | — | — | |
| GE Aerospace | 1.50 | — | — | — | — | |
| Honeywell International Inc. | 3.73 | — | — | — | — | |
| Lockheed Martin Corp. | 1.57 | — | — | — | — | |
| RTX Corp. | 2.21 | — | — | — | — | |
| P/S Ratio, Sector | ||||||
| Capital Goods | 2.09 | — | — | — | — | |
| P/S Ratio, Industry | ||||||
| Industrials | 2.07 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 35,355,000,000 ÷ 571,100,000 = 61.91
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 163.64 ÷ 61.91 = 2.64
5 Click competitor name to see calculations.
A significant contraction in the Price-to-Sales (P/S) ratio is observed between 2017 and 2021, indicating a decline in the market valuation relative to the company's revenue generation. The ratio decreased from a high of 4.19 in 2017 to a low of 2.64 in 2021, representing a downward trend in investor willingness to pay for each dollar of sales.
- Share Price Dynamics
- The market price per share exhibited a general downward trajectory over the period, falling from 222.89 US$ in 2017 to 163.64 US$ in 2021. Although a temporary recovery occurred in 2020, where the price rose to 177.10 US$, the overall movement exerted downward pressure on the valuation multiple.
- Sales per Share Performance
- In contrast to the share price, sales per share demonstrated overall growth, increasing from 53.16 US$ in 2017 to 61.91 US$ in 2021. This increase in revenue efficiency per share contributed to the compression of the P/S ratio, as the denominator grew while the numerator generally declined.
- P/S Ratio Volatility and Trend
- The P/S ratio experienced a steady decline from 2017 to 2019, moving from 4.19 to 2.92. A marginal increase to 3.19 was noted in 2020, aligning with the short-term increase in share price. However, by 2021, the ratio reached its lowest point at 2.64, coinciding with the period of highest sales per share, suggesting a valuation disconnect where revenue growth was not mirrored by share price appreciation.
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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 | 571,100,000 | 579,100,000 | 575,600,000 | 575,800,000 | 595,500,000 | |
| Selected Financial Data (US$) | ||||||
| Total 3M Company shareholders’ equity (in millions) | 15,046) | 12,867) | 10,063) | 9,796) | 11,563) | |
| Book value per share (BVPS)2 | 26.35 | 22.22 | 17.48 | 17.01 | 19.42 | |
| Share price1, 3 | 163.64 | 177.10 | 162.89 | 199.84 | 222.89 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 6.21 | 7.97 | 9.32 | 11.75 | 11.48 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 6.62 | — | — | — | — | |
| Eaton Corp. plc | 3.63 | — | — | — | — | |
| GE Aerospace | 2.64 | — | — | — | — | |
| Honeywell International Inc. | 6.91 | — | — | — | — | |
| Lockheed Martin Corp. | 9.62 | — | — | — | — | |
| RTX Corp. | 1.95 | — | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Capital Goods | 4.77 | — | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Industrials | 5.44 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Total 3M Company shareholders’ equity ÷ No. shares of common stock outstanding
= 15,046,000,000 ÷ 571,100,000 = 26.35
3 Closing price as at the filing date of 3M Co. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 163.64 ÷ 26.35 = 6.21
5 Click competitor name to see calculations.
An analysis of valuation multiples from 2017 to 2021 reveals a significant contraction in the Price to Book Value (P/BV) ratio. This trend is characterized by a diverging relationship between the company's market price and its accounting value per share, resulting in a lower valuation multiple over the five-year period.
- Share Price Trends
- The market price per share exhibited a general downward trajectory, declining from a high of 222.89 US$ in 2017 to 163.64 US$ in 2021. Although a temporary recovery occurred in 2020, the overall trend indicates a reduction in market capitalization per share.
- Book Value Per Share (BVPS) Progression
- The BVPS showed resilience and growth over the observed period. After an initial decrease to 17.01 US$ in 2018, the value rose consistently each subsequent year, reaching 26.35 US$ by December 31, 2021. This upward movement indicates an increase in the net asset value attributable to each share of common stock.
- P/BV Ratio Compression
- The P/BV ratio experienced a sustained decline after peaking at 11.75 in 2018. By 2021, the ratio had fallen to 6.21, representing a nearly 47% decrease from its 2018 peak. This compression is the result of the simultaneous decline in share price and the increase in book value per share, suggesting that the market has attributed a lower premium to the company's book value over time.
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