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
CVS Health Corp., current price multiples
| CVS Health Corp. | Walgreens Boots Alliance Inc. | Food & Drug Retailers | Consumer Services | |
|---|---|---|---|---|
| Selected Financial Data | ||||
| Current share price (P) | $ 79.33 | |||
| No. shares of common stock outstanding | 1,018,799,080 | |||
| Growth rate (g) | 9.97% | |||
| Earnings per share (EPS) | $ 6.50 | |||
| Next year expected EPS | $ 7.15 | |||
| Operating profit per share | $ 9.34 | |||
| Sales per share | $ 181.36 | |||
| Book value per share (BVPS) | $ 37.00 | |||
| Ratios (Price Multiples) | ||||
| Price to earnings (P/E) | 12.20 | 15.59 | 14.87 | 26.29 |
| Price to next year expected earnings | 11.10 | 14.27 | 13.65 | 22.88 |
| Price-earnings-growth (PEG) | 1.22 | 1.69 | 1.66 | 1.76 |
| Price to operating profit (P/OP) | 8.49 | 12.21 | 10.56 | 19.00 |
| Price to sales (P/S) | 0.44 | 0.60 | 0.53 | 1.63 |
| Price to book value (P/BV) | 2.14 | 3.01 | 2.44 | 6.69 |
Based on: 10-K (filing date: 2018-02-14).
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)
CVS Health Corp., historical price multiples
Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).
| 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. | CVS Health Corp.'s P/E ratio declined from 2015 to 2016 and 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. | CVS Health Corp.'s P/OP ratio declined from 2015 to 2016 and 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. | CVS Health Corp.'s P/S ratio declined from 2015 to 2016 and 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. | CVS Health Corp.'s P/BV ratio declined from 2015 to 2016 and from 2016 to 2017. |
Price to Earnings (P/E)
CVS Health Corp., 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 | 1,014,532,157 | 1,025,699,605 | 1,098,490,835 | 1,125,252,739 | 1,182,427,156 | |
| Selected Financial Data (USD $) | ||||||
| Net income attributable to CVS Health (in millions) | 6,622 | 5,317 | 5,237 | 4,644 | 4,592 | |
| Earnings per share (EPS)3 | 6.53 | 5.18 | 4.77 | 4.13 | 3.88 | |
| Share price1, 2 | 69.79 | 77.31 | 90.51 | 101.68 | 68.77 | |
| Ratio | ||||||
| P/E ratio4 | 10.69 | 14.91 | 18.98 | 24.64 | 17.71 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors | ||||||
| Walgreens Boots Alliance Inc. | 17.17 | 21.03 | 21.92 | 29.61 | 22.56 | |
| P/E Ratio, Sector | ||||||
| Food & Drug Retailers | 13.16 | 17.60 | 20.29 | 26.10 | 19.39 | |
| P/E Ratio, Industry | ||||||
| Consumer Services | 23.72 | 22.94 | 23.82 | 24.38 | 19.34 | |
Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of CVS Health Corp.'s Annual Report.
2017 Calculations
3 EPS = Net income attributable to CVS Health ÷ No. shares of common stock outstanding
= 6,622,000,000 ÷ 1,014,532,157 = 6.53
4 P/E ratio = Share price ÷ EPS
= 69.79 ÷ 6.53 = 10.69
| 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. | CVS Health Corp.'s P/E ratio declined from 2015 to 2016 and from 2016 to 2017. |
Price to Operating Profit (P/OP)
CVS Health Corp., 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 | 1,014,532,157 | 1,025,699,605 | 1,098,490,835 | 1,125,252,739 | 1,182,427,156 | |
| Selected Financial Data (USD $) | ||||||
| Operating profit (in millions) | 9,517 | 10,366 | 9,475 | 8,799 | 8,037 | |
| Operating profit per share3 | 9.38 | 10.11 | 8.63 | 7.82 | 6.80 | |
| Share price1, 2 | 69.79 | 77.31 | 90.51 | 101.68 | 68.77 | |
| Ratio | ||||||
| P/OP ratio4 | 7.44 | 7.65 | 10.49 | 13.00 | 10.12 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors | ||||||
| Walgreens Boots Alliance Inc. | 12.60 | 14.63 | 19.81 | 13.64 | 14.03 | |
| P/OP Ratio, Sector | ||||||
| Food & Drug Retailers | 9.34 | 10.21 | 13.57 | 13.21 | 11.40 | |
| P/OP Ratio, Industry | ||||||
| Consumer Services | 17.15 | 14.94 | 14.41 | 13.89 | 13.77 | |
Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of CVS Health Corp.'s Annual Report.
2017 Calculations
3 Operating profit per share = Operating profit ÷ No. shares of common stock outstanding
= 9,517,000,000 ÷ 1,014,532,157 = 9.38
4 P/OP ratio = Share price ÷ Operating profit per share
= 69.79 ÷ 9.38 = 7.44
| 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. | CVS Health Corp.'s P/OP ratio declined from 2015 to 2016 and from 2016 to 2017. |
Price to Sales (P/S)
CVS Health Corp., 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 | 1,014,532,157 | 1,025,699,605 | 1,098,490,835 | 1,125,252,739 | 1,182,427,156 | |
| Selected Financial Data (USD $) | ||||||
| Net revenues (in millions) | 184,765 | 177,526 | 153,290 | 139,367 | 126,761 | |
| Sales per share3 | 182.12 | 173.08 | 139.55 | 123.85 | 107.20 | |
| Share price1, 2 | 69.79 | 77.31 | 90.51 | 101.68 | 68.77 | |
| Ratio | ||||||
| P/S ratio4 | 0.38 | 0.45 | 0.65 | 0.82 | 0.64 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors | ||||||
| Walgreens Boots Alliance Inc. | 0.59 | 0.75 | 0.89 | 0.75 | 0.77 | |
| P/S Ratio, Sector | ||||||
| Food & Drug Retailers | 0.46 | 0.57 | 0.75 | 0.80 | 0.69 | |
| P/S Ratio, Industry | ||||||
| Consumer Services | 1.47 | 1.30 | 1.28 | 1.17 | 1.15 | |
Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of CVS Health Corp.'s Annual Report.
2017 Calculations
3 Sales per share = Net revenues ÷ No. shares of common stock outstanding
= 184,765,000,000 ÷ 1,014,532,157 = 182.12
4 P/S ratio = Share price ÷ Sales per share
= 69.79 ÷ 182.12 = 0.38
| 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. | CVS Health Corp.'s P/S ratio declined from 2015 to 2016 and from 2016 to 2017. |
Price to Book Value (P/BV)
CVS Health Corp., 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 | 1,014,532,157 | 1,025,699,605 | 1,098,490,835 | 1,125,252,739 | 1,182,427,156 | |
| Selected Financial Data (USD $) | ||||||
| Total CVS Health shareholders' equity (in millions) | 37,691 | 36,830 | 37,196 | 37,958 | 37,938 | |
| Book value per share (BVPS)3 | 37.15 | 35.91 | 33.86 | 33.73 | 32.08 | |
| Share price1, 2 | 69.79 | 77.31 | 90.51 | 101.68 | 68.77 | |
| Ratio | ||||||
| P/BV ratio4 | 1.88 | 2.15 | 2.67 | 3.01 | 2.14 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors | ||||||
| Walgreens Boots Alliance Inc. | 2.55 | 2.94 | 3.00 | 2.80 | 2.84 | |
| P/BV Ratio, Sector | ||||||
| Food & Drug Retailers | 2.16 | 2.50 | 2.82 | 2.94 | 2.38 | |
| P/BV Ratio, Industry | ||||||
| Consumer Services | 6.03 | 5.14 | 5.26 | 4.41 | 4.01 | |
Based on: 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-09), 10-K (filing date: 2015-02-10), 10-K (filing date: 2014-02-11).
1 Data adjusted for splits and stock dividends.
2 Close price on the filing date of CVS Health Corp.'s Annual Report.
2017 Calculations
3 BVPS = Total CVS Health shareholders' equity ÷ No. shares of common stock outstanding
= 37,691,000,000 ÷ 1,014,532,157 = 37.15
4 P/BV ratio = Share price ÷ BVPS
= 69.79 ÷ 37.15 = 1.88
| 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. | CVS Health Corp.'s P/BV ratio declined from 2015 to 2016 and from 2016 to 2017. |