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
Ecolab Inc., current price multiples
| Ecolab Inc. | Linde plc | Sherwin-Williams Co. | Chemicals | Materials | ||||
|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||
| Current share price (P) | $180.30 | |||||||
| No. shares of common stock outstanding | 286,751,531 | |||||||
| Growth rate (g) | 11.49% | |||||||
| Earnings per share (EPS) | $3.94 | |||||||
| Next year expected EPS | $4.39 | |||||||
| Operating profit per share | $5.57 | |||||||
| Sales per share | $44.40 | |||||||
| Book value per share (BVPS) | $25.19 | |||||||
| Valuation Ratios (Price Multiples) | ||||||||
| Price to earnings (P/E) | 45.76 | 31.40 | 31.10 | 52.11 | 40.05 | |||
| Price to next year expected earnings | 41.04 | 29.26 | 21.16 | 49.03 | 36.07 | |||
| Price-earnings-growth (PEG) | 3.98 | 4.29 | 0.66 | 8.31 | 3.63 | |||
| Price to operating profit (P/OP) | 32.34 | 24.28 | 20.95 | 39.31 | 25.16 | |||
| Price to sales (P/S) | 4.06 | 6.37 | 3.39 | 5.84 | 5.44 | |||
| Price to book value (P/BV) | 7.16 | 5.66 | 17.37 | 6.38 | 6.62 | |||
Based on: 10-K (reporting date: 2021-12-31).
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)
Ecolab Inc., historical price multiples
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
An analysis of the valuation multiples from 2017 to 2021 reveals a general trend of valuation expansion across all tracked metrics. The market attributed a higher premium to the equity over the five-year period, with a notable peak in valuation ratios occurring around December 31, 2020, followed by a partial correction in 2021.
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibited significant growth, rising from 25.06 in 2017 to 45.76 by 2021. Despite a slight stabilization between 2018 and 2019, the ratio ended the period at its highest point, indicating a substantial increase in the multiple investors were willing to pay per dollar of earnings.
- Price to Operating Profit (P/OP) Ratio
- A consistent upward trajectory was observed from 2017 (18.71) through 2020, where the ratio reached a peak of 42.88. This represents a more than twofold increase in the valuation relative to operating profit. A subsequent decline to 32.34 was noted in 2021, though the level remained considerably higher than the 2017 baseline.
- Price to Sales (P/S) Ratio
- The P/S ratio followed a pattern similar to the operating profit multiple, increasing from 2.73 in 2017 to a peak of 5.08 in 2020. A moderate contraction occurred in 2021, with the ratio settling at 4.06, suggesting a period of intensified valuation relative to revenue generation followed by a normalization phase.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio demonstrated the most pronounced peak, climbing from 4.96 in 2017 to 9.70 in 2020. The ratio then decreased to 7.16 in 2021. This trend indicates a significant expansion in the market value of the equity relative to its accounting book value, peaking in 2020.
Overall, the synchronized peak across the P/OP, P/S, and P/BV ratios in 2020 suggests a period of maximum valuation stretch. While most ratios corrected downward in 2021, they remained elevated compared to 2017 levels, reflecting a fundamental shift in the company's valuation profile over the analyzed timeframe.
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Price to Earnings (P/E)
Ecolab Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) attributable to Ecolab (in thousands) | 1,129,900) | (1,205,100) | 1,558,900) | 1,429,100) | 1,508,400) | |
| Earnings per share (EPS)2 | 3.94 | -4.22 | 5.41 | 4.96 | 5.22 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 45.76 | — | 33.36 | 34.27 | 25.06 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Linde plc | 38.92 | — | — | — | — | |
| Sherwin-Williams Co. | 37.32 | — | — | — | — | |
| P/E Ratio, Sector | ||||||
| Chemicals | 38.39 | — | — | — | — | |
| P/E Ratio, Industry | ||||||
| Materials | 28.21 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income (loss) attributable to Ecolab ÷ No. shares of common stock outstanding
= 1,129,900,000 ÷ 286,751,531 = 3.94
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 180.30 ÷ 3.94 = 45.76
5 Click competitor name to see calculations.
Analysis of valuation metrics from 2017 to 2021 reveals a period of significant earnings volatility coupled with a general expansion of the price-to-earnings multiple.
- Share Price Trajectory
- The share price experienced a consistent upward trend from 2017 through 2020, climbing from 130.84 to a peak of 209.36. This growth phase was followed by a correction in 2021, where the price declined to 180.30.
- Earnings per Share (EPS) Volatility
- Earnings were relatively stable between 2017 and 2019, ranging from 4.96 to 5.41. A significant downturn occurred in 2020, with EPS falling to -4.22, indicating a substantial loss. Although profitability returned in 2021 with an EPS of 3.94, the recovery remained incomplete as earnings stayed below the 2017-2019 average.
- Price-to-Earnings (P/E) Multiple Expansion
- The P/E ratio shifted from 25.06 in 2017 to 33.36 by 2019. The ratio was not applicable in 2020 due to negative earnings. In 2021, the P/E ratio reached its highest point at 45.76. This sharp increase suggests that the market maintained a high valuation for the stock despite the fact that earnings had not yet returned to their previous peak, reflecting increased investor optimism or an expectation of future growth.
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Price to Operating Profit (P/OP)
Ecolab Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | 1,598,600) | 1,395,700) | 2,013,800) | 1,947,000) | 2,019,800) | |
| Operating profit per share2 | 5.57 | 4.88 | 6.99 | 6.76 | 6.99 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 32.34 | 42.88 | 25.82 | 25.16 | 18.71 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Linde plc | 29.87 | — | — | — | — | |
| Sherwin-Williams Co. | 27.19 | — | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Chemicals | 28.96 | — | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Materials | 17.73 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 1,598,600,000 ÷ 286,751,531 = 5.57
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 180.30 ÷ 5.57 = 32.34
5 Click competitor name to see calculations.
An analysis of the valuation multiples from 2017 to 2021 reveals a significant expansion in the Price to Operating Profit (P/OP) ratio, characterized by a period of steady growth followed by a sharp peak and a subsequent partial correction.
- Share Price Trends
- A consistent upward trajectory in share price was observed from 2017 through 2020, with the value rising from 130.84 US$ to a peak of 209.36 US$. This represents a substantial increase in market valuation over four years before the price retracted to 180.30 US$ by the end of 2021.
- Operating Profit per Share Performance
- Operating profit per share remained relatively stable between 2017 and 2019, fluctuating narrowly around 6.76 US$ to 6.99 US$. A notable contraction occurred in 2020, where operating profit dropped to 4.88 US$, marking the lowest point in the period analyzed. A partial recovery followed in 2021, with the figure increasing to 5.57 US$.
- Price to Operating Profit (P/OP) Ratio Analysis
- The P/OP ratio expanded from 18.71 in 2017 to 32.34 in 2021. The most significant volatility occurred in 2020, when the ratio spiked to 42.88. This peak was driven by the simultaneous occurrence of the highest share price and the lowest operating profit per share, suggesting a temporary decoupling of market price from operational earnings. By 2021, the ratio moderated to 32.34 as the share price declined and operating profits began to recover.
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Price to Sales (P/S)
Ecolab Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | 12,733,100) | 11,790,200) | 14,906,300) | 14,668,200) | 13,838,300) | |
| Sales per share2 | 44.40 | 41.25 | 51.73 | 50.96 | 47.91 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 4.06 | 5.08 | 3.49 | 3.34 | 2.73 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Linde plc | 4.84 | — | — | — | — | |
| Sherwin-Williams Co. | 3.49 | — | — | — | — | |
| P/S Ratio, Sector | ||||||
| Chemicals | 4.31 | — | — | — | — | |
| P/S Ratio, Industry | ||||||
| Materials | 3.83 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 12,733,100,000 ÷ 286,751,531 = 44.40
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 180.30 ÷ 44.40 = 4.06
5 Click competitor name to see calculations.
The valuation of the common stock exhibits a general expansion in the price-to-sales multiple over the five-year period from 2017 to 2021, characterized by a significant peak in 2020 followed by a partial correction.
- Share Price Trajectory
- A consistent upward trend is observed from 2017 through 2020, with the share price rising from 130.84 US$ to a peak of 209.36 US$. A subsequent decline occurred in 2021, bringing the price to 180.30 US$, effectively returning the valuation to levels seen in 2019.
- Sales per Share Performance
- Revenue efficiency grew steadily between 2017 and 2019, peaking at 51.73 US$. However, a sharp contraction occurred in 2020, where sales per share dropped to 41.25 US$. A modest recovery was noted in 2021, with values increasing to 44.40 US$, although they remained below the 2019 peak.
- Price-to-Sales (P/S) Ratio Analysis
- The P/S ratio increased from 2.73 in 2017 to 3.49 in 2019, indicating a rising market premium relative to revenue. This trend accelerated sharply in 2020, reaching a maximum ratio of 5.08. This spike was driven by the divergence between a peaking share price and a simultaneous decline in sales per share. By 2021, the ratio moderated to 4.06, reflecting a realignment of the share price with the recovering revenue base.
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Price to Book Value (P/BV)
Ecolab Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Total Ecolab shareholders’ equity (in thousands) | 7,224,200) | 6,166,500) | 8,685,300) | 8,003,200) | 7,618,500) | |
| Book value per share (BVPS)2 | 25.19 | 21.57 | 30.14 | 27.80 | 26.37 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 7.16 | 9.70 | 5.99 | 6.12 | 4.96 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Linde plc | 3.38 | — | — | — | — | |
| Sherwin-Williams Co. | 28.55 | — | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Chemicals | 4.70 | — | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Materials | 4.66 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Total Ecolab shareholders’ equity ÷ No. shares of common stock outstanding
= 7,224,200,000 ÷ 286,751,531 = 25.19
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 180.30 ÷ 25.19 = 7.16
5 Click competitor name to see calculations.
The valuation of common stock between 2017 and 2021 reflects a period of notable volatility in the Price to Book Value (P/BV) ratio, driven by diverging movements between market pricing and the book value per share.
- Share Price Trends
- The share price exhibited a general upward trajectory from 2017 through 2020, rising from 130.84 US$ to a five-year peak of 209.36 US$. A correction followed in 2021, with the price receding to 180.30 US$.
- Book Value per Share (BVPS) Movements
- BVPS grew steadily from 26.37 US$ in 2017 to a high of 30.14 US$ in 2019. A significant contraction occurred in 2020, where the value dropped to 21.57 US$, before experiencing a partial recovery to 25.19 US$ by the end of 2021.
- Price to Book Value (P/BV) Analysis
- The P/BV ratio expanded from 4.96 in 2017 to 7.16 in 2021. The ratio remained relatively stable between 2018 and 2019, fluctuating slightly between 6.12 and 5.99. A sharp spike to 9.70 was observed in 2020, coinciding with the simultaneous peak in share price and the trough in BVPS. The ratio moderated to 7.16 in 2021 as the share price declined and book value began to rebound.
The overall trend indicates an increasing market premium over the accounting book value over the five-year period. The extreme divergence observed in 2020 highlights a period where market sentiment significantly decoupled from the underlying book value of the equity.
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