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
CVS Health Corp., current price multiples
CVS Health Corp. | Consumer Services | ||
---|---|---|---|
Selected Financial Data | |||
Current share price (P) | $69.64 | ||
No. shares of common stock outstanding | 1,311,354,926 | ||
Growth rate (g) | 8.32% | ||
Earnings per share (EPS) | $5.47 | ||
Next year expected EPS | $5.93 | ||
Operating profit per share | $10.61 | ||
Sales per share | $204.30 | ||
Book value per share (BVPS) | $52.91 | ||
Valuation Ratios (Price Multiples) | |||
Price to earnings (P/E) | 12.72 | 45.86 | |
Price to next year expected earnings | 11.74 | 39.78 | |
Price-earnings-growth (PEG) | 1.53 | 3.00 | |
Price to operating profit (P/OP) | 6.56 | 29.49 | |
Price to sales (P/S) | 0.34 | 2.31 | |
Price to book value (P/BV) | 1.32 | 9.55 |
Based on: 10-K (filing date: 2021-02-16).
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)
CVS Health Corp., historical price multiples
Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).
Valuation 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 decreased from 2018 to 2019 and from 2019 to 2020. |
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 decreased from 2018 to 2019 and from 2019 to 2020. |
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 increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level. |
Price to Earnings (P/E)
CVS Health Corp., historical P/E calculation, comparison to benchmarks
Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
EPS = Net income (loss) attributable to CVS Health ÷ No. shares of common stock outstanding
= 7,179,000,000 ÷ 1,311,354,926 = 5.47
3 Closing price as at the filing date of CVS Health Corp.’s Annual Report.
4 2020 Calculation
P/E ratio = Share price ÷ EPS
= 70.53 ÷ 5.47 = 12.88
Price to Operating Profit (P/OP)
CVS Health Corp., historical P/OP calculation, comparison to benchmarks
Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 13,911,000,000 ÷ 1,311,354,926 = 10.61
3 Closing price as at the filing date of CVS Health Corp.’s Annual Report.
4 2020 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 70.53 ÷ 10.61 = 6.65
Valuation 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 decreased from 2018 to 2019 and from 2019 to 2020. |
Price to Sales (P/S)
CVS Health Corp., historical P/S calculation, comparison to benchmarks
Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
Sales per share = Revenues from customers ÷ No. shares of common stock outstanding
= 267,908,000,000 ÷ 1,311,354,926 = 204.30
3 Closing price as at the filing date of CVS Health Corp.’s Annual Report.
4 2020 Calculation
P/S ratio = Share price ÷ Sales per share
= 70.53 ÷ 204.30 = 0.35
Valuation 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 decreased from 2018 to 2019 and from 2019 to 2020. |
Price to Book Value (P/BV)
CVS Health Corp., historical P/BV calculation, comparison to benchmarks
Based on: 10-K (filing date: 2021-02-16), 10-K (filing date: 2020-02-18), 10-K (filing date: 2019-02-28), 10-K (filing date: 2018-02-14), 10-K (filing date: 2017-02-09).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
BVPS = Total CVS Health shareholders’ equity ÷ No. shares of common stock outstanding
= 69,389,000,000 ÷ 1,311,354,926 = 52.91
3 Closing price as at the filing date of CVS Health Corp.’s Annual Report.
4 2020 Calculation
P/BV ratio = Share price ÷ BVPS
= 70.53 ÷ 52.91 = 1.33
Valuation 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 increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level. |