Becton, Dickinson & Co. (NYSE:BDX)

The financial ratios for the company over the periods from December 31, 2015, through March 31, 2022, exhibit several notable trends and fluctuations that provide insight into its valuation and market expectations.

Price to Earnings (P/E) Ratio

The P/E ratio data begins with missing values and shows significant volatility in subsequent periods. Starting from a ratio of 36.65 on December 31, 2015, it declined to a range around 28 to 30 in early 2016 but then surged to a peak of 408.36 on September 30, 2018. After this peak, the ratio decreased markedly, fluctuating in the range of approximately 34 to 97 through 2019 and 2020. In 2021 and the first quarter of 2022, the P/E ratio stabilized somewhat in a mid-range, around 35 to 50. This pattern suggests periods of heightened investor optimism or speculative valuation, particularly around 2018, followed by a normalization phase in the following years.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio follows a broadly similar pattern to the P/E ratio, starting from lower values around 20 to 25 in early periods and rising sharply to a peak of 95.72 on June 30, 2018. After this peak, the ratio declined steadily, reaching a low of approximately 24.81 by December 31, 2021. The ratio then experienced a slight increase to 32.47 and 28.57 in early 2022. This indicates that the market's valuation relative to operating profitability became more conservative after mid-2018 but maintained some variability reflective of changing profitability expectations.

Price to Sales (P/S) Ratio

The Price to Sales ratio shows a more gradual upward trend from 2.87 at the initial available data point through to a peak near 4.94 on March 31, 2018. Following this, the ratio generally declined, with fluctuations maintained between approximately 3.4 and 4.4 from late 2018 to early 2022. This suggests revenue valuation experienced less volatility compared to earnings and operating profit ratios, potentially indicating relatively stable sales growth or market assessment of sales multiples.

Price to Book Value (P/BV) Ratio

The P/BV ratio exhibits moderate fluctuation, beginning around 3.97 at December 31, 2015, peaking close to 4.99 by December 31, 2016, then experiencing a downward trend to as low as 2.78 at December 31, 2020. From then onward, the ratio showed moderate recovery, settling around 3.0 to 3.19 in early 2022. Overall, this pattern suggests moderate variations in market valuation relative to the company's net asset value, possibly affected by balance sheet changes or shifts in market sentiment regarding asset quality.

In summary, the P/E and P/OP ratios reveal pronounced volatility with pronounced peaks around mid-2018, followed by corrections and a phase of relative stabilization. The P/S ratio indicates a steady broader trend in valuation relative to sales, with less dramatic variation. The P/BV ratio reflects moderate valuation shifts based on book value. These trends collectively imply periods of heightened market valuation followed by adjustments, reflecting changing profit expectations and market conditions over the analyzed timeframe.

The share price demonstrated a general upward trend from December 31, 2015, through March 31, 2022, moving from $135.25 to $259.64. There were notable periods of accelerated growth, particularly between March 31, 2016, and September 30, 2017, where the price climbed from $164.84 to a peak of $244.46 around December 31, 2021. Relatively minor volatility is observed, with intermittent declines such as around September 30, 2020, when the price dropped to $227.47, before rebounding again toward $270.58 by December 31, 2021. The overall trajectory indicates a substantial appreciation over the period.*

Earnings per share (EPS) data, available from the third quarter of 2016 onward, reveal significant fluctuations. EPS rose sharply from 4.6 to above 6.15 in the initial periods, reflecting improved profitability. However, subsequent quarters showed volatility, including a drastic fall to negative territory (-0.37) by June 30, 2018. Recovery phases followed, with EPS generally oscillating between approximately 2.5 and 7.05 in later quarters. The most recent quarters reflect strengthening EPS with values exceeding 5.8, signaling a recovery in earnings capacity after some earlier instability.*

The price-to-earnings (P/E) ratio shows pronounced volatility and a few conspicuous spikes, underscoring periods of earnings weakness or market optimism. Initially, it decreased from 36.65 to 28.94 reflecting improved earnings relative to price. Thereafter, it rose sharply to very high levels such as 206.04 and even 408.36 in specific quarters, corresponding to periods when EPS was quite low or negative. From around 2019 onward, the P/E ratio gradually declined from elevated levels to a range of about 34.68 to 45.97, indicating that either earnings growth outpaced price increases or market valuations became more conservative.*

In summary, the share price exhibited a resilient upward movement over the analysis period, despite fluctuations in earnings. EPS trends reveal cyclical performance with periods of stress, but the recent recovery and stabilization are positive indicators. The P/E ratio's sharp spikes correspond with earnings volatility but has moderated in recent years, suggesting improving alignment between market valuation and earnings fundamentals. These patterns collectively suggest a company experiencing episodic earnings challenges while maintaining or growing its market valuation, potentially reflecting market confidence in long-term prospects despite short-term fluctuations.*

Share Price Trend

The share price demonstrated an overall upward trend from December 2015 through March 2022. Beginning at $135.25 at the end of 2015, it rose substantially to reach a peak of $270.58 by the end of 2021. There were occasional fluctuations, such as a dip in late 2020 where the price fell to $227.47, but the general trajectory was positive. The share price exhibited moderate volatility but maintained growth over the analyzed period.

Operating Profit Per Share Trend

Operating profit per share data begins from September 2016, showing values that fluctuate across the quarters. Initial values were around $6.74 and $8.88, followed by a decline to $2.37 in March 2018. Subsequently, operating profit per share rebounded, moving generally upward with some short-term declines. By December 2021, it had increased to $9.85, indicating an improving operational profitability per share over the years despite periodic decreases.

Price to Operating Profit (P/OP) Ratio Trend

The P/OP ratio exhibits considerable volatility throughout the periods analyzed. Starting at 25.02 in September 2016, the ratio increased significantly, reaching unusually high values such as 95.72 in March 2018. This indicates that during some quarters, the market price was high relative to operating profits, possibly reflecting market optimism or lower operating profits at those times. After 2018, the ratio generally decreased, settling in the mid-20s to low 30s range by early 2022, suggesting a normalization or valuation alignment with operating profit levels. The fluctuation in this ratio underlines variability in market perception relative to the underlying operating profitability.

General Observations

The share price consistent growth juxtaposed with fluctuating operating profits implies that factors beyond operating profit may have influenced investor sentiment and valuation. The volatility in the P/OP ratio further supports this, as the ratio reached extreme highs during periods of relatively low operating profit per share. Toward the later periods, the stabilization of this ratio along with rising operating profits suggests a more balanced relationship between market valuation and operating performance. Despite intermittent dips in operating profit, the company appears to have been improving profitability on a per-share basis overall.

The share price of the company showed an overall upward trend from December 31, 2015, to March 31, 2022. Initially priced at $135.25, the price increased steadily, reaching a peak of $270.58 by December 31, 2021. Notable fluctuations occurred during this period, with a slight decline at the beginning of 2020 and some volatility through 2021 and early 2022, ending at $259.64 in March 2022.

Sales per share data is available from June 30, 2016, onward. Sales per share demonstrated moderate variability, initially declining from $58.79 in June 2016 to a low of $46.01 in December 2017. Afterwards, a consistent upward trend was observed, with sales per share rising to $71.29 by March 31, 2022, indicating growth in revenue generation on a per-share basis over this period.

The price-to-sales (P/S) ratio exhibited significant fluctuations, reflecting changes in stock price relative to sales per share. Starting at 2.87 in June 2016, the ratio increased to a peak of 4.94 in December 2017, suggesting the market valued the stock more highly in relation to sales at that time. Following this peak, the P/S ratio generally trended downward, reaching a low of 3.43 in December 2021 before slightly rising again to 3.69 in March 2022.

Share Price Trend

Steady growth with some volatility, doubling over the observed period, peaking near the end of 2021 before a mild decline.

Sales per Share Trend

Initial decline from mid-2016 to late 2017, followed by sustained growth through early 2022.

Price-to-Sales Ratio

Increased sharply until late 2017, then decreased with minor fluctuations, reflecting changing market valuation relative to sales.

Interpretation

The rising share price alongside increasing sales per share indicates enhanced investor confidence supported by improving sales performance. The P/S ratio peak in late 2017 suggests a period of heightened valuation which later normalized, possibly due to stock price adjustments or improved sales figures. The recent moderate P/S ratios imply a more balanced market assessment between share price and sales.

The analysis of the quarterly financial data reveals several key trends in the share price, book value per share (BVPS), and price-to-book value (P/BV) ratio over the observed periods.

Share Price

The share price generally exhibited an upward trend from the end of 2015 through early 2020, increasing from approximately $135.25 to a peak near $259.61 in the third quarter of 2020. A notable rise was observed between early 2017 and late 2017, where the price surpassed $220. After reaching its peak in late 2020, the share price experienced some volatility but remained relatively stable, fluctuating in the range of approximately $240 to $270 through early 2022.

Book Value per Share (BVPS)

BVPS displayed a steady gradual increase over time with a few fluctuations. Starting at around $34.10 in late 2015, it increased consistently, reaching above $80 in the latter quarters of 2020 and maintaining a level in the mid $80 range into early 2022. The steady growth in BVPS suggests consistent gains in the company's net asset value per share over the period.

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

The P/BV ratio demonstrated notable variability. Initially, the ratio rose from approximately 3.97 at the end of 2015 to near 4.99 in late 2016, indicating the market price increasing at a faster pace than the book value. Subsequently, this ratio declined to a low near 2.78 by late 2020, reflecting either a relative increase in book value or some correction in the share price. After reaching this low, the ratio showed a moderate upward trend, moving back above 3.0 in 2021 and early 2022, suggesting a modest recovery in market valuation relative to book value.

Overall, the data indicate that the company experienced consistent growth in intrinsic value as reflected by BVPS, while market valuation as measured by share price generally increased but exhibited more pronounced fluctuations. The P/BV ratio movements highlight periods where market sentiment and valuation relative to book value shifted, with a peak in 2016 followed by a correction phase around 2020 and a partial recovery thereafter.