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
Apache Corp., current price multiples
| Apache Corp. | Chevron Corp. | ConocoPhillips | ExxonMobil Holdings Corp. | ||
|---|---|---|---|---|---|
| Selected Financial Data | |||||
| Current share price (P) | $50.18 | ||||
| No. shares of common stock outstanding | 379,423,069 | ||||
| Earnings per share (EPS) | $-60.93 | ||||
| Operating profit per share | $-73.56 | ||||
| Sales per share | $16.82 | ||||
| Book value per share (BVPS) | $6.76 | ||||
| Valuation Ratios (Price Multiples) | |||||
| Price to sales (P/S) | 2.98 | 2.28 | 2.76 | 2.08 | |
| Price to book value (P/BV) | 7.42 | 2.26 | 2.52 | 2.60 | |
Based on: 10-K (reporting date: 2015-12-31).
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)
Apache Corp., historical price multiples
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
The valuation ratios for the period between 2011 and 2015 exhibit significant volatility, particularly regarding book value and earnings multiples. While some metrics show a steady progression in the early part of the period, others demonstrate sharp fluctuations toward the end of the timeframe.
- Earnings and Operating Profit Multiples
- A general expansion in valuation multiples is observed between 2011 and 2013. The Price to Earnings (P/E) ratio increased sharply from 9.20 in 2011 to 15.01 in 2012, before slightly moderating to 14.30 in 2013. Similarly, the Price to Operating Profit (P/OP) ratio showed a consistent upward trajectory, rising from 5.08 in 2011 to 6.61 by 2013. No figures are available for these metrics in 2014 and 2015.
- Revenue Valuation
- The Price to Sales (P/S) ratio experienced a decline from 2.47 in 2011 to 1.70 in 2012. Following this drop, the ratio remained relatively stable, fluctuating between 1.80 and 1.91 during 2013 and 2014, before ascending to 2.34 by December 31, 2015.
- Book Value Valuation
- The Price to Book Value (P/BV) ratio shows the most dramatic shift. After starting at 1.43 in 2011, the ratio dropped below 1.00 for three consecutive years, reaching a low of 0.92 in 2012 and remaining near that level through 2014. This trend reversed abruptly in 2015, with the ratio spiking to 5.82, indicating a substantial increase in market valuation relative to the company's book value.
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Price to Earnings (P/E)
Apache Corp., historical P/E calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 378,297,784 | 376,823,368 | 394,724,983 | 391,758,883 | 384,321,970 | |
| Selected Financial Data (US$) | ||||||
| Income (loss) attributable to common stock (in millions) | (23,119) | (5,403) | 2,188) | 1,925) | 4,508) | |
| Earnings per share (EPS)2 | -61.11 | -14.34 | 5.54 | 4.91 | 11.73 | |
| Share price1, 3 | 39.47 | 65.84 | 79.29 | 73.75 | 107.93 | |
| Valuation Ratio | ||||||
| P/E ratio4 | — | — | 14.30 | 15.01 | 9.20 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
EPS = Income (loss) attributable to common stock ÷ No. shares of common stock outstanding
= -23,119,000,000 ÷ 378,297,784 = -61.11
3 Closing price as at the filing date of Apache Corp. Annual Report.
4 2015 Calculation
P/E ratio = Share price ÷ EPS
= 39.47 ÷ -61.11 = —
5 Click competitor name to see calculations.
The valuation metrics from 2011 to 2015 exhibit a severe downward trajectory, characterized by a significant contraction in market valuation and a transition from profitability to substantial losses.
- Share Price Trend
- A consistent decline in share price is observed, falling from a peak of 107.93 US$ in 2011 to 39.47 US$ by December 31, 2015. This represents a substantial erosion of market value over the five-year period.
- Earnings Performance
- Earnings per share (EPS) demonstrated a sharp deterioration. After starting at 11.73 US$ in 2011, earnings fell to 4.91 US$ in 2012 and 5.54 US$ in 2013, before collapsing into negative figures of -14.34 US$ in 2014 and -61.11 US$ in 2015.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio increased from 9.20 in 2011 to 15.01 in 2012 and 14.30 in 2013, indicating that share prices did not decline as rapidly as earnings during the initial phase of the downturn. For 2014 and 2015, the P/E ratio is unavailable, which is a direct result of the negative earnings reported during those fiscal years.
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Price to Operating Profit (P/OP)
Apache Corp., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 378,297,784 | 376,823,368 | 394,724,983 | 391,758,883 | 384,321,970 | |
| Selected Financial Data (US$) | ||||||
| Operating income (loss) (in millions) | (27,910) | (2,878) | 4,738) | 4,911) | 8,173) | |
| Operating profit per share2 | -73.78 | -7.64 | 12.00 | 12.54 | 21.27 | |
| Share price1, 3 | 39.47 | 65.84 | 79.29 | 73.75 | 107.93 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | — | — | 6.61 | 5.88 | 5.08 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
Operating profit per share = Operating income (loss) ÷ No. shares of common stock outstanding
= -27,910,000,000 ÷ 378,297,784 = -73.78
3 Closing price as at the filing date of Apache Corp. Annual Report.
4 2015 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 39.47 ÷ -73.78 = —
5 Click competitor name to see calculations.
A severe deterioration in both market valuation and operational profitability is observed between 2011 and 2015. The period is characterized by a consistent decline in share price and a collapse in operating profit per share, leading to the eventual disappearance of a positive price-to-operating profit ratio.
- Share Price Trend
- The share price exhibited a strong downward trajectory over the five-year period. Starting at 107.93 US$ in 2011, the price fell to 73.75 US$ in 2012, with a brief period of stabilization in 2013 at 79.29 US$. A sharp decline followed, with the price dropping to 65.84 US$ in 2014 and ending at 39.47 US$ in 2015, representing a total decrease of approximately 63% from the 2011 peak.
- Operating Profit per Share Performance
- Operating profitability experienced a catastrophic decline. In 2011, the operating profit per share was 21.27 US$, which fell to 12.54 US$ in 2012 and 12.00 US$ in 2013. The company transitioned into operational losses by 2014, posting -7.64 US$ per share, and suffered a massive expansion of these losses to -73.78 US$ per share by 2015.
- Price to Operating Profit (P/OP) Ratio Analysis
- Between 2011 and 2013, the P/OP ratio showed a gradual increase from 5.08 to 6.61. This upward trend in the ratio occurred despite the falling share price, indicating that operating profit per share was declining at a faster rate than the market price of the stock. From 2014 onward, the P/OP ratio is no longer applicable as operating profits became negative, rendering the multiple mathematically meaningless for valuation purposes.
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Price to Sales (P/S)
Apache Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 378,297,784 | 376,823,368 | 394,724,983 | 391,758,883 | 384,321,970 | |
| Selected Financial Data (US$) | ||||||
| Oil and gas production revenues (in millions) | 6,383) | 13,749) | 16,402) | 16,947) | 16,810) | |
| Sales per share2 | 16.87 | 36.49 | 41.55 | 43.26 | 43.74 | |
| Share price1, 3 | 39.47 | 65.84 | 79.29 | 73.75 | 107.93 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 2.34 | 1.80 | 1.91 | 1.70 | 2.47 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
Sales per share = Oil and gas production revenues ÷ No. shares of common stock outstanding
= 6,383,000,000 ÷ 378,297,784 = 16.87
3 Closing price as at the filing date of Apache Corp. Annual Report.
4 2015 Calculation
P/S ratio = Share price ÷ Sales per share
= 39.47 ÷ 16.87 = 2.34
5 Click competitor name to see calculations.
A comprehensive analysis of the valuation metrics between 2011 and 2015 reveals a significant decline in both equity value and revenue generation per share, though the price-to-sales relationship remained relatively stable over the period.
- Share Price Trajectory
- A consistent downward trend is observed in the share price, which fell from a peak of 107.93 US$ in 2011 to 39.47 US$ by the end of 2015. This represents a substantial contraction in market capitalization per share over the five-year window.
- Sales per Share Performance
- Revenue efficiency remained relatively stable from 2011 to 2013, fluctuating between 41.55 US$ and 43.74 US$. However, a sharp decline occurred thereafter, with sales per share dropping to 36.49 US$ in 2014 and plummeting to 16.87 US$ in 2015.
- Price to Sales (P/S) Ratio Analysis
- The P/S ratio exhibited volatility but did not follow the linear decline seen in share price and sales. After an initial drop from 2.47 in 2011 to 1.70 in 2012, the ratio fluctuated between 1.80 and 1.91 through 2014. In 2015, the ratio increased to 2.34, indicating that the decline in sales per share was more severe than the decline in the share price during that specific period.
The divergence observed in 2015 suggests a valuation anomaly where the market maintained a higher multiple despite a collapse in top-line revenue per share. Overall, the period is characterized by a systemic erosion of both nominal share value and revenue capacity.
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Price to Book Value (P/BV)
Apache Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 378,297,784 | 376,823,368 | 394,724,983 | 391,758,883 | 384,321,970 | |
| Selected Financial Data (US$) | ||||||
| Total Apache shareholders’ equity (in millions) | 2,566) | 25,937) | 33,396) | 31,331) | 28,993) | |
| Book value per share (BVPS)2 | 6.78 | 68.83 | 84.61 | 79.98 | 75.44 | |
| Share price1, 3 | 39.47 | 65.84 | 79.29 | 73.75 | 107.93 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 5.82 | 0.96 | 0.94 | 0.92 | 1.43 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
BVPS = Total Apache shareholders’ equity ÷ No. shares of common stock outstanding
= 2,566,000,000 ÷ 378,297,784 = 6.78
3 Closing price as at the filing date of Apache Corp. Annual Report.
4 2015 Calculation
P/BV ratio = Share price ÷ BVPS
= 39.47 ÷ 6.78 = 5.82
5 Click competitor name to see calculations.
Between 2011 and 2015, Apache Corp. experienced a significant decline in both market valuation and book value, culminating in a dramatic shift in its price-to-book value (P/BV) ratio during the final year of the period.
- Share Price Performance
- A consistent downward trajectory is observed in the share price, which fell from a peak of 107.93 US$ in 2011 to 39.47 US$ by December 31, 2015. The most acute contraction occurred between 2014 and 2015, where the price decreased by approximately 40%.
- Book Value per Share (BVPS) Trends
- The BVPS initially exhibited growth, rising from 75.44 US$ in 2011 to a peak of 84.61 US$ in 2013. This trend reversed in 2014 with a decline to 68.83 US$, followed by a severe collapse in 2015, where the BVPS dropped to 6.78 US$. This indicates a substantial erosion of the company's equity base in the final year.
- Price to Book Value (P/BV) Ratio Analysis
- The P/BV ratio remained relatively stable and below unity between 2012 and 2014, fluctuating between 0.92 and 0.96, suggesting the market valued the company at a slight discount to its accounting book value. However, in 2015, the ratio spiked to 5.82. This increase was not driven by a recovery in share price, but rather by the precipitous decline in BVPS, resulting in a mathematical inflation of the multiple despite the deteriorating financial position.
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