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
EOG Resources Inc., current price multiples
| EOG Resources Inc. | Chevron Corp. | ConocoPhillips | ExxonMobil Holdings Corp. | ||
|---|---|---|---|---|---|
| Selected Financial Data | |||||
| Current share price (P) | $60.00 | ||||
| No. shares of common stock outstanding | 582,054,451 | ||||
| Growth rate (g) | -0.90% | ||||
| Earnings per share (EPS) | $4.70 | ||||
| Next year expected EPS | $4.66 | ||||
| Operating profit per share | $6.36 | ||||
| Sales per share | $29.86 | ||||
| Book value per share (BVPS) | $37.18 | ||||
| Valuation Ratios (Price Multiples) | |||||
| Price to earnings (P/E) | 12.77 | 34.85 | 20.59 | 23.94 | |
| Price to next year expected earnings | 12.89 | 33.33 | 18.36 | 22.09 | |
| Price to operating profit (P/OP) | 9.44 | 20.15 | 12.15 | 16.33 | |
| Price to sales (P/S) | 2.01 | 2.32 | 2.79 | 2.13 | |
| Price to book value (P/BV) | 1.61 | 2.30 | 2.55 | 2.66 | |
Based on: 10-K (reporting date: 2019-12-31).
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)
EOG Resources Inc., historical price multiples
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The valuation multiples for EOG Resources Inc. exhibit a comprehensive trend of contraction across all measured metrics leading into 2019. While certain ratios experienced a peak in 2016, a consistent downward trajectory is observed in the subsequent years, indicating a decrease in the market premium attributed to earnings, sales, and book value.
- Price to Earnings (P/E)
- A steady decline is observed from 2017 to 2019, with the ratio falling from 23.96 to 12.77. This downward trend suggests a compression in the multiple the market is willing to pay per dollar of earnings.
- Price to Operating Profit (P/OP)
- The most significant volatility is noted in this ratio, which experienced a sharp contraction from 66.80 in 2017 to 12.19 in 2018, further decreasing to 9.44 by the end of 2019.
- Price to Sales (P/S)
- After reaching a peak of 7.38 in 2016, the sales multiple entered a period of sustained decline, falling to 5.52 in 2017, 3.15 in 2018, and ultimately reaching 2.01 in 2019.
- Price to Book Value (P/BV)
- A pattern similar to the Price to Sales ratio is observed, with a peak of 4.04 in 2016 followed by a consistent decrease to 1.61 by December 31, 2019.
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Price to Earnings (P/E)
EOG Resources Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 582,054,451 | 580,053,225 | 578,636,343 | 576,832,077 | 549,883,390 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) (in thousands) | 2,734,910) | 3,419,040) | 2,582,579) | (1,096,686) | (4,524,515) | |
| Earnings per share (EPS)2 | 4.70 | 5.89 | 4.46 | -1.90 | -8.23 | |
| Share price1, 3 | 60.00 | 93.91 | 106.94 | 97.91 | 68.50 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 12.77 | 15.93 | 23.96 | — | — | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
EPS = Net income (loss) ÷ No. shares of common stock outstanding
= 2,734,910,000 ÷ 582,054,451 = 4.70
3 Closing price as at the filing date of EOG Resources Inc. Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= 60.00 ÷ 4.70 = 12.77
5 Click competitor name to see calculations.
The financial period from 2015 to 2019 was characterized by a significant transition from net losses to consistent profitability, accompanied by substantial volatility in market valuation.
- Earnings Per Share (EPS) Performance
- A strong recovery trend is observed in earnings. The company transitioned from a substantial loss of -8.23 US$ per share in 2015 to a positive earning of 4.46 US$ in 2017. EPS peaked in 2018 at 5.89 US$ before experiencing a slight contraction to 4.70 US$ in 2019.
- Share Price Volatility
- The share price exhibited an upward trajectory between 2015 and 2017, reaching a peak of 106.94 US$. This was followed by a steady decline, with the price falling to 93.91 US$ in 2018 and dropping sharply to 60.00 US$ by the end of 2019, representing a significant reduction from its peak valuation.
- Price-to-Earnings (P/E) Ratio Trends
- The P/E ratio was not applicable during 2015 and 2016 due to negative earnings. Upon returning to profitability in 2017, the P/E ratio stood at 23.96. A consistent downward trend in the multiple followed, decreasing to 15.93 in 2018 and further to 12.77 in 2019. This compression indicates that the market attributed a lower valuation multiple to the company's earnings over this three-year period, despite the maintenance of positive EPS.
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Price to Operating Profit (P/OP)
EOG Resources Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 582,054,451 | 580,053,225 | 578,636,343 | 576,832,077 | 549,883,390 | |
| Selected Financial Data (US$) | ||||||
| Operating income (loss) (in thousands) | 3,699,011) | 4,469,346) | 926,402) | (1,225,281) | (6,686,079) | |
| Operating profit per share2 | 6.36 | 7.71 | 1.60 | -2.12 | -12.16 | |
| Share price1, 3 | 60.00 | 93.91 | 106.94 | 97.91 | 68.50 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 9.44 | 12.19 | 66.80 | — | — | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Operating profit per share = Operating income (loss) ÷ No. shares of common stock outstanding
= 3,699,011,000 ÷ 582,054,451 = 6.36
3 Closing price as at the filing date of EOG Resources Inc. Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 60.00 ÷ 6.36 = 9.44
5 Click competitor name to see calculations.
The financial trajectory from 2015 to 2019 is characterized by a transition from significant operating losses to sustained profitability, accompanied by a subsequent normalization of the valuation multiple.
- Operating Profitability Trends
- A recovery in operational performance is evident, moving from a substantial operating loss per share of -12.16 US$ in 2015 to a positive 1.60 US$ in 2017. Profitability peaked in 2018 at 7.71 US$ per share before experiencing a moderate decline to 6.36 US$ in 2019.
- Share Price Movement
- The share price exhibited an upward trend in the first half of the period, rising from 68.50 US$ in 2015 to a peak of 106.94 US$ in 2017. This was followed by a consistent downward trend, with the price falling to 93.91 US$ in 2018 and reaching a period low of 60.00 US$ by the end of 2019.
- Price to Operating Profit (P/OP) Analysis
- The P/OP ratio was not applicable during 2015 and 2016 due to negative operating profits. In 2017, the ratio appeared exceptionally high at 66.80, reflecting a disproportionate relationship between the peak share price and the initial return to profitability. A sharp contraction in the ratio occurred thereafter, dropping to 12.19 in 2018 and further to 9.44 in 2019, signaling a valuation correction and a more grounded alignment between market price and operational earnings.
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Price to Sales (P/S)
EOG Resources Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 582,054,451 | 580,053,225 | 578,636,343 | 576,832,077 | 549,883,390 | |
| Selected Financial Data (US$) | ||||||
| Operating revenues and other (in thousands) | 17,379,973) | 17,275,399) | 11,208,320) | 7,650,632) | 8,757,428) | |
| Sales per share2 | 29.86 | 29.78 | 19.37 | 13.26 | 15.93 | |
| Share price1, 3 | 60.00 | 93.91 | 106.94 | 97.91 | 68.50 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 2.01 | 3.15 | 5.52 | 7.38 | 4.30 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
Sales per share = Operating revenues and other ÷ No. shares of common stock outstanding
= 17,379,973,000 ÷ 582,054,451 = 29.86
3 Closing price as at the filing date of EOG Resources Inc. Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= 60.00 ÷ 29.86 = 2.01
5 Click competitor name to see calculations.
An analysis of the valuation multiples from 2015 to 2019 reveals a significant contraction in the Price-to-Sales (P/S) ratio, moving from 4.30 to 2.01. This trend indicates a decreasing market premium attributed to each dollar of revenue generated per share over the five-year period.
- Price-to-Sales Ratio Volatility
- The P/S ratio experienced an initial sharp increase, peaking at 7.38 in 2016. Following this peak, a consistent downward trajectory was observed, with the ratio falling to 5.52 in 2017, 3.15 in 2018, and reaching its lowest point of 2.01 by the end of 2019.
- Divergence Between Sales and Valuation
- A notable divergence exists between revenue performance and market valuation. Sales per share grew substantially, rising from 15.93 in 2015 to 29.86 in 2019. Despite this growth in fundamental revenue generation, the P/S ratio declined, suggesting that the market's willingness to pay a premium for these sales diminished as the period progressed.
- Impact of Share Price Fluctuations
- The valuation compression was heavily influenced by the volatility of the share price. While the price peaked at 106.94 in 2017, it declined sharply to 60.00 by 2019. This decline in equity value occurred simultaneously with the period of highest sales per share, resulting in the significant reduction of the P/S multiple.
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Price to Book Value (P/BV)
EOG Resources Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 582,054,451 | 580,053,225 | 578,636,343 | 576,832,077 | 549,883,390 | |
| Selected Financial Data (US$) | ||||||
| Stockholders’ equity (in thousands) | 21,640,716) | 19,364,188) | 16,283,273) | 13,981,581) | 12,943,035) | |
| Book value per share (BVPS)2 | 37.18 | 33.38 | 28.14 | 24.24 | 23.54 | |
| Share price1, 3 | 60.00 | 93.91 | 106.94 | 97.91 | 68.50 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 1.61 | 2.81 | 3.80 | 4.04 | 2.91 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
2 2019 Calculation
BVPS = Stockholders’ equity ÷ No. shares of common stock outstanding
= 21,640,716,000 ÷ 582,054,451 = 37.18
3 Closing price as at the filing date of EOG Resources Inc. Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= 60.00 ÷ 37.18 = 1.61
5 Click competitor name to see calculations.
The financial data reveals a divergence between the growth of the intrinsic book value and the market valuation of the common stock over the five-year period ending December 31, 2019.
- Book Value per Share (BVPS) Growth
- A consistent and uninterrupted upward trend is observed in the book value per share. Starting at US$ 23.54 in 2015, the BVPS increased annually, reaching US$ 37.18 by 2019. This indicates a steady accumulation of net assets or retained earnings attributable to shareholders.
- Share Price Performance
- The share price exhibited significant volatility, rising from US$ 68.50 in 2015 to a peak of US$ 106.94 in 2017. Following this peak, a sharp decline occurred, with the price falling to US$ 60.00 by December 31, 2019, which is lower than the 2015 starting point.
- Price to Book Value (P/BV) Ratio Analysis
- The P/BV ratio peaked in 2016 at 4.04, representing the highest market premium relative to book value during the period. Subsequently, a contraction in the multiple is observed, with the ratio falling to 1.61 by 2019. This downward trajectory in the P/BV ratio was driven by the combination of a declining share price and a simultaneously increasing book value per share, resulting in a significant compression of the valuation multiple.
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