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
Altria Group Inc., current price multiples
| Altria Group Inc. | Philip Morris International Inc. | Tobacco | Consumer Goods | |
|---|---|---|---|---|
| Selected Financial Data | ||||
| Current share price (P) | $ 48.31 | |||
| No. shares of common stock outstanding | 1,879,045,481 | |||
| Growth rate (g) | 56.04% | |||
| Earnings per share (EPS) | $ 5.44 | |||
| Next year expected EPS | $ 8.49 | |||
| Operating profit per share | $ 5.09 | |||
| Sales per share | $ 13.61 | |||
| Book value per share (BVPS) | $ 8.18 | |||
| Ratios (Price Multiples) | ||||
| Price to earnings (P/E) | 8.88 | 19.01 | 12.64 | 19.12 |
| Price to next year expected earnings | 5.69 | – | 0.42 | 17.36 |
| Price-earnings-growth (PEG) | 0.16 | – | 0.00 | 1.88 |
| Price to operating profit (P/OP) | 9.50 | 9.97 | 9.76 | 13.52 |
| Price to sales (P/S) | 3.55 | 1.47 | 1.98 | 1.83 |
| Price to book value (P/BV) | 5.90 | – | 62.44 | 4.70 |
Based on: 10-K (filing date: 2018-02-27).
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)
Altria Group Inc., historical price multiples
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).
| 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. | Altria Group Inc.’s P/E ratio declined from 2015 to 2016 but then slightly increased from 2016 to 2017. |
| 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. | Altria Group Inc.’s P/OP ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
| 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. | Altria Group Inc.’s P/S ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
| 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. | Altria Group Inc.’s P/BV ratio declined from 2015 to 2016 and from 2016 to 2017. |
Price to Earnings (P/E)
Altria Group Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,900,449,362 | 1,939,420,437 | 1,957,931,815 | 1,969,316,914 | 1,992,853,529 | |
| Selected Financial Data (USD $) | ||||||
| Net earnings attributable to Altria Group, Inc. (in millions) | 10,222 | 14,239 | 5,241 | 5,070 | 4,535 | |
| Earnings per share (EPS)3 | 5.38 | 7.34 | 2.68 | 2.57 | 2.28 | |
| Share price1, 2 | 64.00 | 74.59 | 62.38 | 55.64 | 35.44 | |
| Ratio | ||||||
| P/E ratio4 | 11.90 | 10.16 | 23.30 | 21.61 | 15.57 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors | ||||||
| Philip Morris International Inc. | 26.52 | 22.84 | 20.57 | 17.14 | 14.60 | |
| P/E Ratio, Sector | ||||||
| Tobacco | 17.33 | 14.33 | 21.75 | 18.95 | 14.93 | |
| P/E Ratio, Industry | ||||||
| Consumer Goods | 20.55 | 19.00 | 20.47 | 21.82 | 16.94 | |
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Altria Group Inc.’s Annual Report.
2017 Calculations
3 EPS = Net earnings attributable to Altria Group, Inc. ÷ No. shares of common stock outstanding
= 10,222,000,000 ÷ 1,900,449,362 = 5.38
4 P/E ratio = Share price ÷ EPS
= 64.00 ÷ 5.38 = 11.90
| 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. | Altria Group Inc.’s P/E ratio declined from 2015 to 2016 but then slightly increased from 2016 to 2017. |
Price to Operating Profit (P/OP)
Altria Group Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,900,449,362 | 1,939,420,437 | 1,957,931,815 | 1,969,316,914 | 1,992,853,529 | |
| Selected Financial Data (USD $) | ||||||
| Operating income (in millions) | 9,556 | 8,762 | 8,361 | 7,620 | 8,084 | |
| Operating profit per share3 | 5.03 | 4.52 | 4.27 | 3.87 | 4.06 | |
| Share price1, 2 | 64.00 | 74.59 | 62.38 | 55.64 | 35.44 | |
| Ratio | ||||||
| P/OP ratio4 | 12.73 | 16.51 | 14.61 | 14.38 | 8.74 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors | ||||||
| Philip Morris International Inc. | 13.91 | 14.71 | 13.31 | 10.98 | 9.26 | |
| P/OP Ratio, Sector | ||||||
| Tobacco | 13.38 | 15.52 | 13.88 | 12.32 | 9.07 | |
| P/OP Ratio, Industry | ||||||
| Consumer Goods | 14.53 | 15.56 | 15.65 | 15.73 | 12.80 | |
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Altria Group Inc.’s Annual Report.
2017 Calculations
3 Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 9,556,000,000 ÷ 1,900,449,362 = 5.03
4 P/OP ratio = Share price ÷ Operating profit per share
= 64.00 ÷ 5.03 = 12.73
| 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. | Altria Group Inc.’s P/OP ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
Price to Sales (P/S)
Altria Group Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,900,449,362 | 1,939,420,437 | 1,957,931,815 | 1,969,316,914 | 1,992,853,529 | |
| Selected Financial Data (USD $) | ||||||
| Net revenues (in millions) | 25,576 | 25,744 | 25,434 | 24,522 | 24,466 | |
| Sales per share3 | 13.46 | 13.27 | 12.99 | 12.45 | 12.28 | |
| Share price1, 2 | 64.00 | 74.59 | 62.38 | 55.64 | 35.44 | |
| Ratio | ||||||
| P/S ratio4 | 4.76 | 5.62 | 4.80 | 4.47 | 2.89 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors | ||||||
| Philip Morris International Inc. | 2.05 | 2.12 | 1.91 | 1.60 | 1.56 | |
| P/S Ratio, Sector | ||||||
| Tobacco | 2.72 | 3.02 | 2.65 | 2.28 | 1.87 | |
| P/S Ratio, Industry | ||||||
| Consumer Goods | 1.97 | 1.98 | 1.83 | 1.67 | 1.50 | |
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Altria Group Inc.’s Annual Report.
2017 Calculations
3 Sales per share = Net revenues ÷ No. shares of common stock outstanding
= 25,576,000,000 ÷ 1,900,449,362 = 13.46
4 P/S ratio = Share price ÷ Sales per share
= 64.00 ÷ 13.46 = 4.76
| 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. | Altria Group Inc.’s P/S ratio increased from 2015 to 2016 but then declined significantly from 2016 to 2017. |
Price to Book Value (P/BV)
Altria Group Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,900,449,362 | 1,939,420,437 | 1,957,931,815 | 1,969,316,914 | 1,992,853,529 | |
| Selected Financial Data (USD $) | ||||||
| Stockholders’ equity attributable to Altria Group, Inc. (in millions) | 15,377 | 12,770 | 2,880 | 3,014 | 4,119 | |
| Book value per share (BVPS)3 | 8.09 | 6.58 | 1.47 | 1.53 | 2.07 | |
| Share price1, 2 | 64.00 | 74.59 | 62.38 | 55.64 | 35.44 | |
| Ratio | ||||||
| P/BV ratio4 | 7.91 | 11.33 | 42.41 | 36.35 | 17.15 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors | ||||||
| Philip Morris International Inc. | – | – | – | – | – | |
| P/BV Ratio, Sector | ||||||
| Tobacco | 85.59 | 3,704.91 | – | – | – | |
| P/BV Ratio, Industry | ||||||
| Consumer Goods | 5.05 | 5.29 | 4.91 | 5.49 | 4.30 | |
Based on: 10-K (filing date: 2018-02-27), 10-K (filing date: 2017-02-27), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of Altria Group Inc.’s Annual Report.
2017 Calculations
3 BVPS = Stockholders’ equity attributable to Altria Group, Inc. ÷ No. shares of common stock outstanding
= 15,377,000,000 ÷ 1,900,449,362 = 8.09
4 P/BV ratio = Share price ÷ BVPS
= 64.00 ÷ 8.09 = 7.91
| 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. | Altria Group Inc.’s P/BV ratio declined from 2015 to 2016 and from 2016 to 2017. |