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
Caterpillar Inc., current price multiples
| Caterpillar Inc. | 3M Co. | Boeing Co. | General Electric Co. | Honeywell International Inc. | Illinois Tool Works Inc. | Lockheed Martin Corp. | Raytheon Technologies Corp. | Capital Goods | Industrials | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||
| Current share price (P) | $198.73 | ||||||||||||
| No. shares of common stock outstanding | 540,941,600 | ||||||||||||
| Growth rate (g) | 0.61% | ||||||||||||
| Earnings per share (EPS) | $5.54 | ||||||||||||
| Next year expected EPS | $5.58 | ||||||||||||
| Operating profit per share | $8.42 | ||||||||||||
| Sales per share | $72.14 | ||||||||||||
| Book value per share (BVPS) | $28.34 | ||||||||||||
| Valuation Ratios (Price Multiples) | |||||||||||||
| Price to earnings (P/E) | 35.86 | 18.79 | — | 20.54 | 29.99 | 34.94 | 13.83 | — | 72.77 | 56.42 | |||
| Price to next year expected earnings | 35.64 | 15.88 | — | 21.30 | 26.97 | 27.14 | 5.88 | — | 73.04 | 52.53 | |||
| Price-earnings-growth (PEG) | 59.04 | 1.03 | — | — | 2.67 | 1.22 | 0.10 | — | — | 7.64 | |||
| Price to operating profit (P/OP) | 23.61 | 14.12 | — | 26.78 | 25.16 | 25.57 | 10.93 | — | 47.50 | 32.11 | |||
| Price to sales (P/S) | 2.75 | 3.14 | 2.01 | 1.47 | 4.39 | 5.86 | 1.45 | 2.20 | 2.35 | 2.55 | |||
| Price to book value (P/BV) | 7.01 | 7.86 | — | 3.02 | 8.17 | 23.16 | 15.71 | 1.72 | 6.02 | 6.85 | |||
Based on: 10-K (filing date: 2021-02-17).
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)
Caterpillar Inc., historical price multiples
Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).
| Valuation 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. | Caterpillar Inc.’s P/E ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
| 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. | Caterpillar Inc.’s P/OP ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
| 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. | Caterpillar Inc.’s P/S ratio increased 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. | Caterpillar Inc.’s P/BV ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
Price to Earnings (P/E)
Caterpillar Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 545,303,847 | 550,082,610 | 575,542,738 | 597,625,772 | 586,486,024 | |
| Selected Financial Data (US$) | ||||||
| Profit (loss) attributable to common stockholders (in millions) | 2,998 | 6,093 | 6,147 | 754 | (67) | |
| Earnings per share (EPS)2 | 5.50 | 11.08 | 10.68 | 1.26 | -0.11 | |
| Share price1, 3 | 202.30 | 136.86 | 132.62 | 159.98 | 99.02 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 36.80 | 12.36 | 12.42 | 126.80 | — | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| 3M Co. | 19.05 | 20.52 | 21.51 | 27.32 | 21.04 | |
| Boeing Co. | — | — | 21.87 | 24.68 | 20.50 | |
| General Electric Co. | 19.67 | — | — | — | 32.22 | |
| Honeywell International Inc. | 29.63 | 20.97 | 16.02 | 67.20 | 19.29 | |
| Illinois Tool Works Inc. | 30.18 | 23.76 | 18.46 | 33.07 | 21.80 | |
| Lockheed Martin Corp. | 13.44 | 19.87 | 16.88 | 48.70 | 14.14 | |
| Raytheon Technologies Corp. | — | 24.41 | 19.74 | 21.97 | 17.55 | |
| P/E Ratio, Sector | ||||||
| Capital Goods | 70.10 | 35.96 | 45.64 | 52.68 | 23.51 | |
| P/E Ratio, Industry | ||||||
| Industrials | 50.89 | 30.51 | 30.35 | 26.39 | 23.61 | |
Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
EPS = Profit (loss) attributable to common stockholders ÷ No. shares of common stock outstanding
= 2,998,000,000 ÷ 545,303,847 = 5.50
3 Closing price as at the filing date of Caterpillar Inc.’s Annual Report.
4 2020 Calculation
P/E ratio = Share price ÷ EPS
= 202.30 ÷ 5.50 = 36.80
5 Click competitor name to see calculations.
| Valuation 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. | Caterpillar Inc.’s P/E ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
Price to Operating Profit (P/OP)
Caterpillar Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 545,303,847 | 550,082,610 | 575,542,738 | 597,625,772 | 586,486,024 | |
| Selected Financial Data (US$) | ||||||
| Operating profit (in millions) | 4,553 | 8,290 | 8,293 | 4,406 | 498 | |
| Operating profit per share2 | 8.35 | 15.07 | 14.41 | 7.37 | 0.85 | |
| Share price1, 3 | 202.30 | 136.86 | 132.62 | 159.98 | 99.02 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 24.23 | 9.08 | 9.20 | 21.70 | 116.61 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| 3M Co. | 14.32 | 15.19 | 15.97 | 16.97 | 14.71 | |
| Boeing Co. | — | — | 19.08 | 19.69 | 17.20 | |
| General Electric Co. | 25.64 | 9.22 | 8.57 | 12.27 | 19.05 | |
| Honeywell International Inc. | 24.86 | 18.81 | 16.16 | 15.55 | 13.88 | |
| Illinois Tool Works Inc. | 22.08 | 17.61 | 13.20 | 15.97 | 14.48 | |
| Lockheed Martin Corp. | 10.63 | 14.49 | 11.62 | 16.47 | 13.51 | |
| Raytheon Technologies Corp. | — | 15.07 | 12.16 | 11.53 | 10.86 | |
| P/OP Ratio, Sector | ||||||
| Capital Goods | 45.76 | 17.47 | 13.30 | 15.88 | 16.30 | |
| P/OP Ratio, Industry | ||||||
| Industrials | 28.96 | 15.86 | 13.21 | 14.59 | 15.43 | |
Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
Operating profit per share = Operating profit ÷ No. shares of common stock outstanding
= 4,553,000,000 ÷ 545,303,847 = 8.35
3 Closing price as at the filing date of Caterpillar Inc.’s Annual Report.
4 2020 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 202.30 ÷ 8.35 = 24.23
5 Click competitor name to see calculations.
| 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. | Caterpillar Inc.’s P/OP ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |
Price to Sales (P/S)
Caterpillar Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 545,303,847 | 550,082,610 | 575,542,738 | 597,625,772 | 586,486,024 | |
| Selected Financial Data (US$) | ||||||
| Sales of Machinery, Energy & Transportation (in millions) | 39,022 | 50,755 | 51,822 | 42,676 | 35,773 | |
| Sales per share2 | 71.56 | 92.27 | 90.04 | 71.41 | 61.00 | |
| Share price1, 3 | 202.30 | 136.86 | 132.62 | 159.98 | 99.02 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 2.83 | 1.48 | 1.47 | 2.24 | 1.62 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| 3M Co. | 3.19 | 2.92 | 3.51 | 4.19 | 3.53 | |
| Boeing Co. | 1.96 | 2.34 | 2.26 | 2.17 | 1.06 | |
| General Electric Co. | 1.41 | 1.18 | 0.82 | 1.11 | 2.39 | |
| Honeywell International Inc. | 4.34 | 3.51 | 2.59 | 2.74 | 2.36 | |
| Illinois Tool Works Inc. | 5.06 | 4.25 | 3.20 | 3.90 | 3.26 | |
| Lockheed Martin Corp. | 1.40 | 2.07 | 1.58 | 1.91 | 1.59 | |
| Raytheon Technologies Corp. | 1.95 | 1.75 | 1.56 | 1.67 | 1.55 | |
| P/S Ratio, Sector | ||||||
| Capital Goods | 2.27 | 2.07 | 1.80 | 2.06 | 1.94 | |
| P/S Ratio, Industry | ||||||
| Industrials | 2.30 | 2.08 | 1.89 | 2.05 | 1.96 | |
Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
Sales per share = Sales of Machinery, Energy & Transportation ÷ No. shares of common stock outstanding
= 39,022,000,000 ÷ 545,303,847 = 71.56
3 Closing price as at the filing date of Caterpillar Inc.’s Annual Report.
4 2020 Calculation
P/S ratio = Share price ÷ Sales per share
= 202.30 ÷ 71.56 = 2.83
5 Click competitor name to see calculations.
| 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. | Caterpillar Inc.’s P/S ratio increased from 2018 to 2019 and from 2019 to 2020. |
Price to Book Value (P/BV)
Caterpillar Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 545,303,847 | 550,082,610 | 575,542,738 | 597,625,772 | 586,486,024 | |
| Selected Financial Data (US$) | ||||||
| Equity attributable to common stockholders (in millions) | 15,331 | 14,588 | 14,039 | 13,697 | 13,137 | |
| Book value per share (BVPS)2 | 28.11 | 26.52 | 24.39 | 22.92 | 22.40 | |
| Share price1, 3 | 202.30 | 136.86 | 132.62 | 159.98 | 99.02 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 7.20 | 5.16 | 5.44 | 6.98 | 4.42 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| 3M Co. | 7.97 | 9.32 | 11.75 | 11.48 | 10.32 | |
| Boeing Co. | — | — | 674.83 | 569.92 | 122.80 | |
| General Electric Co. | 2.89 | 3.66 | 3.00 | 1.96 | 3.47 | |
| Honeywell International Inc. | 8.07 | 6.97 | 5.96 | 6.44 | 4.79 | |
| Illinois Tool Works Inc. | 20.01 | 19.80 | 14.54 | 12.17 | 10.43 | |
| Lockheed Martin Corp. | 15.27 | 39.60 | 61.11 | — | 49.61 | |
| Raytheon Technologies Corp. | 1.53 | 3.24 | 2.71 | 3.38 | 3.22 | |
| P/BV Ratio, Sector | ||||||
| Capital Goods | 5.80 | 8.12 | 7.37 | 6.55 | 5.42 | |
| P/BV Ratio, Industry | ||||||
| Industrials | 6.18 | 7.23 | 6.59 | 5.88 | 5.38 | |
Based on: 10-K (filing date: 2021-02-17), 10-K (filing date: 2020-02-19), 10-K (filing date: 2019-02-14), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-15).
1 Data adjusted for splits and stock dividends.
2 2020 Calculation
BVPS = Equity attributable to common stockholders ÷ No. shares of common stock outstanding
= 15,331,000,000 ÷ 545,303,847 = 28.11
3 Closing price as at the filing date of Caterpillar Inc.’s Annual Report.
4 2020 Calculation
P/BV ratio = Share price ÷ BVPS
= 202.30 ÷ 28.11 = 7.20
5 Click competitor name to see calculations.
| 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. | Caterpillar Inc.’s P/BV ratio decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level. |