Price to Sales (P/S)
since 2005
Calculation
Air Products & Chemicals Inc., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Sales1 (in thousands) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nov 19, 2020 | 6.75 | = | 270.36 | ÷ | 40.07 | 40.07 | = | 8,856,300 | ÷ | 221,026,592 | |
| Nov 26, 2019 | 5.79 | = | 234.40 | ÷ | 40.46 | 40.46 | = | 8,918,900 | ÷ | 220,433,925 | |
| Nov 20, 2018 | 3.87 | = | 157.56 | ÷ | 40.68 | 40.68 | = | 8,930,200 | ÷ | 219,533,532 | |
| Nov 16, 2017 | 4.30 | = | 161.18 | ÷ | 37.45 | 37.45 | = | 8,187,600 | ÷ | 218,618,346 | |
| Nov 21, 2016 | 3.19 | = | 139.74 | ÷ | 43.82 | 43.82 | = | 9,524,400 | ÷ | 217,375,097 | |
| Nov 24, 2015 | 3.04 | = | 139.47 | ÷ | 45.93 | 45.93 | = | 9,894,900 | ÷ | 215,426,569 | |
| Nov 24, 2014 | 2.74 | = | 133.82 | ÷ | 48.85 | 48.85 | = | 10,439,000 | ÷ | 213,710,798 | |
| Nov 26, 2013 | 2.26 | = | 108.85 | ÷ | 48.19 | 48.19 | = | 10,180,400 | ÷ | 211,275,654 | |
| Nov 20, 2012 | 1.81 | = | 81.61 | ÷ | 45.16 | 45.16 | = | 9,611,700 | ÷ | 212,850,078 | |
| Nov 22, 2011 | 1.64 | = | 78.80 | ÷ | 47.90 | 47.90 | = | 10,082,000 | ÷ | 210,464,383 | |
| Nov 23, 2010 | 2.01 | = | 84.57 | ÷ | 42.12 | 42.12 | = | 9,026,000 | ÷ | 214,275,258 | |
| Nov 25, 2009 | 2.14 | = | 83.34 | ÷ | 39.00 | 39.00 | = | 8,256,200 | ÷ | 211,705,911 | |
| Nov 26, 2008 | 0.94 | = | 46.50 | ÷ | 49.70 | 49.70 | = | 10,414,500 | ÷ | 209,566,838 | |
| Nov 28, 2007 | 2.08 | = | 96.78 | ÷ | 46.60 | 46.60 | = | 10,037,800 | ÷ | 215,386,799 | |
| Dec 13, 2006 | 1.76 | = | 71.79 | ÷ | 40.80 | 40.80 | = | 8,850,400 | ÷ | 216,936,873 | |
| Nov 22, 2005 | 1.65 | = | 60.43 | ÷ | 36.66 | 36.66 | = | 8,143,500 | ÷ | 222,106,958 |
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Air Products & Chemicals Inc. Annual Report.
The analysis of the Price-to-Sales (P/S) ratio from 2005 to 2020 reveals a significant long-term expansion in market valuation relative to revenue generation. The ratio transitioned from a baseline of 1.65 in 2005 to a peak of 6.75 by November 2020, representing a substantial increase in the premium the market assigned to each dollar of sales.
- P/S Ratio Trend and Volatility
- A period of relative stability was observed between 2005 and 2007, with the ratio fluctuating between 1.65 and 2.08. A sharp contraction occurred in 2008, where the P/S ratio dropped to 0.94, coinciding with a significant decrease in share price. Following this trough, the ratio recovered to approximately 2.01 by 2010 and remained relatively stable through 2012.
- Accelerated Multiple Expansion
- Beginning in 2013, a consistent upward trend in the P/S ratio is evident. The ratio climbed from 2.26 in 2013 to 4.30 in 2017, experienced a marginal correction to 3.87 in 2018, and then surged to 6.75 by 2020. This trajectory indicates an aggressive expansion of the valuation multiple over the final seven years of the period.
- Divergence Between Price and Revenue
- The expansion of the P/S ratio is driven by a stark divergence between share price appreciation and sales per share growth. While the share price rose from 60.43 in 2005 to 270.36 in 2020, sales per share remained relatively stagnant, moving from 36.66 to 40.07 over the same timeframe. This suggests that the increase in market value was not driven by proportional growth in top-line revenue per share, but rather by increased investor confidence, higher margin expectations, or broader market re-ratings.
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Comparison to Competitors
Air Products & Chemicals Inc., P/S, long-term trends, comparison to competitors
| Air Products & Chemicals Inc. | Linde plc | Sherwin-Williams Co. | |
|---|---|---|---|
| Nov 19, 2020 | 6.75 | 4.83 | 3.50 |
| Nov 26, 2019 | 5.79 | 3.74 | 2.95 |
| Nov 20, 2018 | 3.87 | 5.71 | 2.33 |
| Nov 16, 2017 | 4.30 | 3.76 | 2.50 |
| Nov 21, 2016 | 3.19 | 3.26 | 2.46 |
| Nov 24, 2015 | 3.04 | 2.69 | 2.11 |
| Nov 24, 2014 | 2.74 | 3.03 | 2.45 |
| Nov 26, 2013 | 2.26 | 3.14 | 1.96 |
| Nov 20, 2012 | 1.81 | 2.96 | 1.75 |
| Nov 22, 2011 | 1.64 | 2.89 | 1.20 |
| Nov 23, 2010 | 2.01 | 2.91 | 1.14 |
| Nov 25, 2009 | 2.14 | 2.60 | 0.99 |
| Nov 26, 2008 | 0.94 | 1.69 | 0.68 |
| Nov 28, 2007 | 2.08 | 2.81 | 0.82 |
| Dec 13, 2006 | 1.76 | 2.37 | 1.15 |
| Nov 22, 2005 | 1.65 | 2.31 | 0.82 |
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Sector (Chemicals)
Air Products & Chemicals Inc., P/S, long-term trends, comparison to sector (chemicals)
| Air Products & Chemicals Inc. | Chemicals | |
|---|---|---|
| Nov 19, 2020 | 6.75 | 4.29 |
| Nov 26, 2019 | 5.79 | 3.44 |
| Nov 20, 2018 | 3.87 | 3.88 |
| Nov 16, 2017 | 4.30 | 3.04 |
| Nov 21, 2016 | 3.19 | 2.83 |
| Nov 24, 2015 | 3.04 | 2.40 |
| Nov 24, 2014 | 2.74 | 2.75 |
| Nov 26, 2013 | 2.26 | 2.59 |
| Nov 20, 2012 | 1.81 | 2.41 |
| Nov 22, 2011 | 1.64 | 2.15 |
| Nov 23, 2010 | 2.01 | 2.14 |
| Nov 25, 2009 | 2.14 | 1.89 |
| Nov 26, 2008 | 0.94 | 1.26 |
| Nov 28, 2007 | 2.08 | 1.89 |
| Dec 13, 2006 | 1.76 | 1.78 |
| Nov 22, 2005 | 1.65 | 1.59 |
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Industry (Materials)
Air Products & Chemicals Inc., P/S, long-term trends, comparison to industry (materials)
| Air Products & Chemicals Inc. | Materials | |
|---|---|---|
| Nov 19, 2020 | 6.75 | 4.08 |
| Nov 26, 2019 | 5.79 | 2.91 |
| Nov 20, 2018 | 3.87 | 2.81 |
| Nov 16, 2017 | 4.30 | 2.50 |
| Nov 21, 2016 | 3.19 | 2.22 |
| Nov 24, 2015 | 3.04 | 1.64 |
| Nov 24, 2014 | 2.74 | 1.94 |
| Nov 26, 2013 | 2.26 | 2.14 |
| Nov 20, 2012 | 1.81 | 2.08 |
| Nov 22, 2011 | 1.64 | 2.06 |
| Nov 23, 2010 | 2.01 | 2.38 |
| Nov 25, 2009 | 2.14 | 2.02 |
| Nov 26, 2008 | 0.94 | 0.98 |
| Nov 28, 2007 | 2.08 | 2.08 |
| Dec 13, 2006 | 1.76 | 1.83 |
| Nov 22, 2005 | 1.65 | 1.77 |
Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).