Becton, Dickinson & Co. (NYSE:BDX)

The analysis of the provided financial ratios over the six-year period reveals several noteworthy trends and fluctuations in the valuation metrics.

Price to Earnings (P/E) Ratio

The P/E ratio exhibits significant volatility throughout the period. Starting at 36.65 in 2016, it increased substantially to reach an exceptionally high peak of 408.36 in 2018. Following this peak, there was a downward correction to 65.09 in 2019, an increase again to 86.01 in 2020, and finally a notable decline to 34.68 in 2021. This pattern suggests fluctuations in market expectations regarding the company’s earnings growth and profitability, as well as possible influences from earnings variability or market sentiment.

Price to Operating Profit (P/OP) Ratio

This ratio showed a generally increasing trend from 25.02 in 2016 to a peak of 44.46 in 2020, indicating rising investor valuations relative to operating profit. However, in 2021, the P/OP ratio declined sharply to 24.81, returning almost to the level observed in 2016. Such a trend may indicate cyclical changes in operating profitability or shifts in investor perception of the company's operating earnings quality or growth prospects.

Price to Sales (P/S) Ratio

The P/S ratio increased from 2.87 in 2016 to a high around 4.23 in 2017, and then remained relatively stable, fluctuating slightly around 4.0 from 2017 to 2019. There was a slight decrease from 3.85 in 2020 to 3.43 in 2021, indicating a modest decline in valuation relative to revenue. This stability followed by a minor decline could reflect steady sales growth with a slight tempering in market valuation toward the end of the period.

Price to Book Value (P/BV) Ratio

The P/BV ratio consistently trended downward over the analyzed timeframe, starting from 4.69 in 2016 to 2.93 in 2021. Despite minor fluctuations, this clear decreasing trend indicates that the market price became less expensive relative to the company’s book value per share over time. This may suggest a growing market skepticism regarding the book value or a reduction in growth expectations related to net asset values.

In summary, valuation multiples show considerable variability, particularly in earnings-related ratios, with peaks and troughs potentially linked to earnings volatility or market sentiment fluctuations. Ratios tied to sales and book value portray more stable or declining valuations, which could reflect steady revenue performance alongside more cautious investor views on asset value and longer-term growth prospects toward the end of the period.

The financial data reveals several notable trends over the analyzed periods.

Share Price

The share price exhibited an overall upward trajectory from 2016 through 2019, increasing from $168.48 to $260.40. However, there was a decline in 2020 to $227.47, followed by a partial recovery to $244.46 in 2021. This suggests some volatility, with a notable dip in 2020 potentially influenced by external market factors or company-specific events.

Earnings Per Share (EPS)

EPS values fluctuated significantly during the period. After starting at $4.60 in 2016, EPS remained relatively stable in 2017 at $4.52 but dropped sharply to $0.59 in 2018. It then recovered to $4.00 in 2019 before declining again to $2.64 in 2020. A strong rebound to $7.05 in 2021 was observed, indicating considerable earnings variability likely driven by operational or market conditions. The EPS data point of 2018 suggests a one-time or exceptional event affecting profitability that year.

Price-to-Earnings (P/E) Ratio

The P/E ratio displayed high volatility aligned partially with EPS fluctuations. Beginning at 36.65 in 2016, the ratio rose sharply to 49.63 in 2017 and then surged dramatically to 408.36 in 2018, coinciding with the steep EPS drop. This unusually high P/E indicates the share price remained elevated despite very low earnings. Subsequently, the ratio decreased to 65.09 in 2019 and increased again to 86.01 in 2020, indicating renewed market caution or earnings volatility. In 2021, the P/E ratio fell back to 34.68, its lowest point in the period analyzed, reflecting the strong EPS rebound and relatively stable share price.

The analysis of the financial data reveals several notable trends over the period from September 30, 2016, to September 30, 2021.

Share Price

The share price exhibited a general upward trend from 2016 to 2019, increasing from $168.48 to $260.40. However, in 2020, there was a decline to $227.47, followed by a moderate recovery to $244.46 in 2021. Despite the fluctuation in 2020, the overall trend denotes growth over the six-year period.

Operating Profit Per Share

Operating profit per share decreased initially from $6.74 in 2016 to $5.58 in 2018, indicating a downward trend. This was followed by an improvement to $6.51 in 2019 but declined again to $5.12 in 2020. In 2021, a significant increase to $9.85 was observed, marking the highest operating profit per share in the period examined. This sharp rise in the final year suggests an improvement in operational efficiency or profitability.

Price to Operating Profit Ratio (P/OP)

The P/OP ratio moved upwards substantially from 25.02 in 2016 to a peak of 44.46 in 2020, which implies that the share price increased faster than operating profit per share during this time, reflecting higher investor expectations or a premium valuation. In 2021, the ratio fell sharply to 24.81, indicating a more favorable valuation relative to operating profit, possibly due to the pronounced increase in operating profit per share.

Share Price

The share price exhibited a generally upward trend from 2016 through 2019, increasing from $168.48 to a peak of $260.40. However, it then declined to $227.47 in 2020 before rising moderately again to $244.46 in 2021. This indicates initial sustained growth followed by some volatility during the period around 2020, potentially reflecting external market or company-specific challenges.

Sales per Share

Sales per share showed some fluctuation over the years. Starting at $58.79 in 2016, it decreased to $53.04 in 2017, then recovered and grew steadily to $63.93 by 2019. After a drop to $59.02 in 2020, sales per share increased sharply to $71.29 in 2021, suggesting a rebound and growth in sales efficiency or volume per share in the most recent period.

Price-to-Sales (P/S) Ratio

The P/S ratio increased significantly from 2.87 in 2016 to a peak around 4.23 in 2017, remaining relatively stable near 4.0 in 2018 and 2019. It then declined steadily to 3.85 in 2020 and further down to 3.43 in 2021. This downward trend indicates that the price per share grew at a slower pace relative to sales per share, suggesting a valuation adjustment or improvement in sales performance relative to stock price.

Share Price

The share price demonstrated an overall upward trend from 2016 to 2019, increasing from 168.48 US dollars in 2016 to a peak of 260.4 US dollars in 2019. However, there was a notable decline in 2020, with the price dropping to 227.47 US dollars, followed by a moderate recovery in 2021 to 244.46 US dollars.

Book Value per Share (BVPS)

The book value per share showed a consistent and steady increase throughout the period under review. Starting at 35.95 US dollars in 2016, it rose significantly to 83.36 US dollars by 2021. This growth indicates an improvement in the company's net asset value on a per-share basis over time.

Price-to-Book Value Ratio (P/BV)

The P/BV ratio exhibited a declining trend over the six-year period. It decreased from 4.69 in 2016 to 2.93 in 2021, with minor fluctuations during the period. This reduction suggests that the market valuation relative to the book value decreased, potentially reflecting either a moderation in market optimism or an increased asset base enhancing book value.

Overall Insights

The data indicate that while the market price of the shares experienced volatility, especially around 2020 likely due to external factors, the underlying book value per share continuously improved, signaling strengthening fundamentals. The declining P/BV ratio points to a convergence between market price and book value, possibly indicating a more conservative market appraisal relative to growth in net assets.