Price to Operating Profit (P/OP)
since 2005
Calculation
Becton, Dickinson & Co., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nov 24, 2021 | 24.81 | = | 244.46 | ÷ | 9.85 | 9.85 | = | 2,799 | ÷ | 284,023,582 | |
| Nov 25, 2020 | 44.46 | = | 227.47 | ÷ | 5.12 | 5.12 | = | 1,484 | ÷ | 290,031,363 | |
| Nov 27, 2019 | 40.02 | = | 260.40 | ÷ | 6.51 | 6.51 | = | 1,760 | ÷ | 270,459,892 | |
| Nov 21, 2018 | 43.37 | = | 242.04 | ÷ | 5.58 | 5.58 | = | 1,497 | ÷ | 268,257,940 | |
| Nov 22, 2017 | 34.59 | = | 224.23 | ÷ | 6.48 | 6.48 | = | 1,478 | ÷ | 227,978,328 | |
| Nov 23, 2016 | 25.02 | = | 168.48 | ÷ | 6.74 | 6.74 | = | 1,430 | ÷ | 212,319,588 | |
| Nov 25, 2015 | 29.46 | = | 150.12 | ÷ | 5.10 | 5.10 | = | 1,074 | ÷ | 210,736,542 | |
| Nov 26, 2014 | 16.89 | = | 141.26 | ÷ | 8.37 | 8.37 | = | 1,606 | ÷ | 191,977,449 | |
| Nov 27, 2013 | 16.86 | = | 108.94 | ÷ | 6.46 | 6.46 | = | 1,254 | ÷ | 194,094,466 | |
| Nov 21, 2012 | 9.71 | = | 76.82 | ÷ | 7.91 | 7.91 | = | 1,558 | ÷ | 196,957,804 | |
| Nov 23, 2011 | 8.62 | = | 70.77 | ÷ | 8.21 | 8.21 | = | 1,763 | ÷ | 214,890,631 | |
| Nov 24, 2010 | 10.71 | = | 78.12 | ÷ | 7.29 | 7.29 | = | 1,677 | ÷ | 229,961,230 | |
| Nov 25, 2009 | 10.85 | = | 75.53 | ÷ | 6.96 | 6.96 | = | 1,650 | ÷ | 237,118,874 | |
| Nov 26, 2008 | 9.96 | = | 63.59 | ÷ | 6.38 | 6.38 | = | 1,552 | ÷ | 243,115,261 | |
| Nov 23, 2007 | 16.93 | = | 83.52 | ÷ | 4.93 | 4.93 | = | 1,203 | ÷ | 243,899,512 | |
| Nov 30, 2006 | 16.84 | = | 71.72 | ÷ | 4.26 | 4.26 | = | 1,050 | ÷ | 246,637,424 | |
| Dec 9, 2005 | 14.21 | = | 58.13 | ÷ | 4.09 | 4.09 | = | 1,031 | ÷ | 252,043,008 |
Based on: 10-K (reporting date: 2021-09-30), 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 Becton, Dickinson & Co. Annual Report.
The analysis of the Price to Operating Profit (P/OP) ratio from 2005 to 2021 reveals a significant shift in market valuation relative to operational performance. The trajectory is characterized by an initial period of relative stability and compression, followed by a period of aggressive valuation expansion, and ending with a sharp contraction driven by increased profitability.
- Valuation Compression and Stability (2005–2012)
- During this period, the P/OP ratio fluctuated within a relatively narrow band, primarily between 8.62 and 16.93. A notable decline occurred between 2007 and 2011, where the ratio dropped from 16.93 to its period low of 8.62. This phase indicates a period where the share price grew more slowly than the operating profit per share, which rose from 4.09 in 2005 to 8.21 in 2011.
- Aggressive Valuation Expansion (2013–2020)
- A regime shift in valuation is evident starting in 2013. The P/OP ratio ascended from 16.86 in 2013 to a peak of 44.46 in 2020. This expansion was characterized by share price appreciation that significantly outpaced the growth of operating profits. For example, between 2017 and 2020, the share price moved from 224.23 to 227.47, but the operating profit per share declined from 6.48 to 5.12, resulting in a substantial increase in the P/OP multiple.
- Operational Correction and Normalization (2021)
- The most recent data point shows a significant correction in the P/OP ratio, which fell to 24.81 in 2021. This contraction was not driven by a collapse in share price, which remained resilient at 244.46, but rather by a substantial increase in operating profit per share, which reached a historical peak of 9.85. This suggests a normalization of the valuation as operational earnings caught up with previous market expectations.
Overall, the long-term trend demonstrates that while the share price has maintained a general upward trajectory over the 16-year period, the premium the market was willing to pay for operating profits expanded dramatically between 2015 and 2020 before correcting in 2021 due to improved operational efficiency.
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Comparison to Competitors
Becton, Dickinson & Co., P/OP, long-term trends, comparison to competitors
| Becton, Dickinson & Co. | Abbott Laboratories | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | |
|---|---|---|---|---|---|
| Nov 24, 2021 | 24.81 | 24.45 | 56.11 | 37.44 | 18.77 |
| Nov 25, 2020 | 44.46 | 40.69 | 88.37 | 26.29 | 14.12 |
| Nov 27, 2019 | 40.02 | 34.03 | 48.89 | 21.26 | 14.40 |
| Nov 21, 2018 | 43.37 | 36.64 | 49.87 | 17.64 | 14.58 |
| Nov 22, 2017 | 34.59 | 60.88 | 44.40 | 22.64 | 14.42 |
| Nov 23, 2016 | 25.02 | 24.25 | 28.93 | 22.18 | 11.79 |
| Nov 25, 2015 | 29.46 | 19.80 | 27.25 | 28.81 | 9.59 |
| Nov 26, 2014 | 16.89 | 27.50 | 34.42 | 16.68 | 10.12 |
| Nov 27, 2013 | 16.86 | 22.79 | 17.96 | 11.80 | 7.22 |
| Nov 21, 2012 | 9.71 | 6.82 | 26.21 | — | 6.32 |
| Nov 23, 2011 | 8.62 | 15.35 | 27.83 | — | 6.55 |
| Nov 24, 2010 | 10.71 | 11.92 | 23.28 | — | 5.90 |
| Nov 25, 2009 | 10.85 | 13.54 | 33.47 | — | 5.95 |
| Nov 26, 2008 | 9.96 | 14.66 | 14.45 | — | 6.59 |
| Nov 23, 2007 | 16.93 | 18.76 | 55.84 | — | 7.62 |
| Nov 30, 2006 | 16.84 | 40.49 | 38.98 | — | 10.47 |
| Dec 9, 2005 | 14.21 | 15.48 | 50.21 | — | 14.87 |
Based on: 10-K (reporting date: 2021-09-30), 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).