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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

Accenture PLC, current price multiples

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Accenture PLC Automatic Data Processing Inc. Support Services Industrials
Selected Financial Data
Current share price (P) $ 157.45
No. shares of common stock outstanding 638,990,838
Growth rate (g) 30.48%
 
Earnings per share (EPS) $ 6.35
Next year expected EPS $ 8.29
Operating profit per share $ 9.14
Sales per share $ 61.93
Book value per share (BVPS) $ 16.22
Ratios (Price Multiples)
Price to earnings (P/E) 24.78 37.63 31.21 25.62
Price to next year expected earnings 18.99 33.22 25.43 23.35
Price-earnings-growth (PEG) 0.81 2.84 1.37 2.64
Price to operating profit (P/OP) 17.22 24.28 23.22 14.01
Price to sales (P/S) 2.54 4.58 3.42 1.92
Price to book value (P/BV) 9.71 17.63 12.50 5.40

Based on: 10-K (filing date: 2018-10-24).

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)

Accenture PLC, historical price multiples

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Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Price to earnings (P/E) 24.10 26.18 18.07 22.75 17.46 15.20
Price to operating profit (P/OP) 16.75 19.47 15.44 15.66 11.94 11.50
Price to sales (P/S) 2.47 2.59 2.26 2.24 1.71 1.75
Price to book value (P/BV) 9.44 10.08 9.83 11.33 8.96 10.06

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

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. Accenture PLC's P/E ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
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. Accenture PLC's P/OP ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 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. Accenture PLC's P/S ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
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. Accenture PLC's P/BV ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

Price to Earnings (P/E)

Accenture PLC, historical P/E calculation, comparison to benchmarks

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Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
No. shares of common stock outstanding1 638,990,838 635,224,220 642,184,419 648,101,194 655,502,521 666,014,836
Selected Financial Data (USD $)
Net income attributable to Accenture plc (in thousands) 4,059,907  3,445,149  4,111,892  3,053,581  2,941,498  3,281,878 
Earnings per share (EPS)3 6.35 5.42 6.40 4.71 4.49 4.93
Share price1, 2 153.12 141.97 115.67 107.20 78.35 74.91
Ratio
P/E ratio4 24.10 26.18 18.07 22.75 17.46 15.20
Benchmarks
P/E Ratio, Competitors
Automatic Data Processing Inc. 36.29 28.56 27.41 25.75 25.73 24.69
P/E Ratio, Sector
Support Services 26.97 20.55 23.72 20.27 18.05
P/E Ratio, Industry
Industrials 28.48 22.75 23.39 18.71 18.53

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Accenture PLC's Annual Report.

2018 Calculations

3 EPS = Net income attributable to Accenture plc ÷ No. shares of common stock outstanding
= 4,059,907,000 ÷ 638,990,838 = 6.35

4 P/E ratio = Share price ÷ EPS
= 153.12 ÷ 6.35 = 24.10

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. Accenture PLC's P/E ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Price to Operating Profit (P/OP)

Accenture PLC, historical P/OP calculation, comparison to benchmarks

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Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
No. shares of common stock outstanding1 638,990,838 635,224,220 642,184,419 648,101,194 655,502,521 666,014,836
Selected Financial Data (USD $)
Operating income (in thousands) 5,841,041  4,632,609  4,810,445  4,435,869  4,300,512  4,338,680 
Operating profit per share3 9.14 7.29 7.49 6.84 6.56 6.51
Share price1, 2 153.12 141.97 115.67 107.20 78.35 74.91
Ratio
P/OP ratio4 16.75 19.47 15.44 15.66 11.94 11.50
Benchmarks
P/OP Ratio, Competitors
Automatic Data Processing Inc. 23.42 21.27 18.67 18.57 17.67 17.38
P/OP Ratio, Sector
Support Services 20.07 16.45 16.57 13.89 13.35
P/OP Ratio, Industry
Industrials 15.57 15.55 12.60 11.54 11.05

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Accenture PLC's Annual Report.

2018 Calculations

3 Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 5,841,041,000 ÷ 638,990,838 = 9.14

4 P/OP ratio = Share price ÷ Operating profit per share
= 153.12 ÷ 9.14 = 16.75

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. Accenture PLC's P/OP ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

Price to Sales (P/S)

Accenture PLC, historical P/S calculation, comparison to benchmarks

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Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
No. shares of common stock outstanding1 638,990,838 635,224,220 642,184,419 648,101,194 655,502,521 666,014,836
Selected Financial Data (USD $)
Revenues before reimbursements (Net revenues) (in thousands) 39,573,450  34,850,182  32,882,723  31,047,931  30,002,394  28,562,810 
Sales per share3 61.93 54.86 51.20 47.91 45.77 42.89
Share price1, 2 153.12 141.97 115.67 107.20 78.35 74.91
Ratio
P/S ratio4 2.47 2.59 2.26 2.24 1.71 1.75
Benchmarks
P/S Ratio, Competitors
Automatic Data Processing Inc. 4.41 4.00 3.51 3.42 3.20 3.07
P/S Ratio, Sector
Support Services 2.96 2.59 2.55 2.14 2.12
P/S Ratio, Industry
Industrials 2.14 1.99 1.73 1.86 1.74

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Accenture PLC's Annual Report.

2018 Calculations

3 Sales per share = Revenues before reimbursements (Net revenues) ÷ No. shares of common stock outstanding
= 39,573,450,000 ÷ 638,990,838 = 61.93

4 P/S ratio = Share price ÷ Sales per share
= 153.12 ÷ 61.93 = 2.47

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. Accenture PLC's P/S ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Price to Book Value (P/BV)

Accenture PLC, historical P/BV calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
No. shares of common stock outstanding1 638,990,838 635,224,220 642,184,419 648,101,194 655,502,521 666,014,836
Selected Financial Data (USD $)
Total Accenture plc shareholders' equity (in thousands) 10,364,753  8,949,477  7,555,262  6,133,725  5,732,035  4,960,186 
Book value per share (BVPS)3 16.22 14.09 11.76 9.46 8.74 7.45
Share price1, 2 153.12 141.97 115.67 107.20 78.35 74.91
Ratio
P/BV ratio4 9.44 10.08 9.83 11.33 8.96 10.06
Benchmarks
P/BV Ratio, Competitors
Automatic Data Processing Inc. 17.00 12.45 9.13 7.78 5.85 5.61
P/BV Ratio, Sector
Support Services 10.81 9.57 9.77 7.29 7.59
P/BV Ratio, Industry
Industrials 6.01 5.41 4.16 3.99 3.30

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of Accenture PLC's Annual Report.

2018 Calculations

3 BVPS = Total Accenture plc shareholders' equity ÷ No. shares of common stock outstanding
= 10,364,753,000 ÷ 638,990,838 = 16.22

4 P/BV ratio = Share price ÷ BVPS
= 153.12 ÷ 16.22 = 9.44

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. Accenture PLC's P/BV ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.