Price to Sales (P/S)
since 2005
Calculation
Emerson Electric Co., P/S, long-term trends, calculation
| P/S | = | Share price1, 2, 3 | ÷ | Sales per share1 | Sales per share1 | = | Net sales1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nov 18, 2019 | 2.42 | = | 73.07 | ÷ | 30.16 | 30.16 | = | 18,372 | ÷ | 609,153,835 | |
| Nov 19, 2018 | 2.46 | = | 68.46 | ÷ | 27.80 | 27.80 | = | 17,408 | ÷ | 626,158,598 | |
| Nov 20, 2017 | 2.53 | = | 60.26 | ÷ | 23.78 | 23.78 | = | 15,264 | ÷ | 641,819,838 | |
| Nov 16, 2016 | 2.43 | = | 54.97 | ÷ | 22.59 | 22.59 | = | 14,522 | ÷ | 642,776,971 | |
| Nov 18, 2015 | 1.47 | = | 50.01 | ÷ | 34.07 | 34.07 | = | 22,304 | ÷ | 654,557,141 | |
| Nov 19, 2014 | 1.81 | = | 64.15 | ÷ | 35.37 | 35.37 | = | 24,537 | ÷ | 693,634,810 | |
| Nov 19, 2013 | 1.92 | = | 67.36 | ÷ | 35.04 | 35.04 | = | 24,669 | ÷ | 703,964,498 | |
| Nov 20, 2012 | 1.44 | = | 48.49 | ÷ | 33.71 | 33.71 | = | 24,412 | ÷ | 724,139,345 | |
| Nov 22, 2011 | 1.47 | = | 48.31 | ÷ | 32.92 | 32.92 | = | 24,222 | ÷ | 735,749,636 | |
| Nov 23, 2010 | 1.97 | = | 55.10 | ÷ | 27.95 | 27.95 | = | 21,039 | ÷ | 752,657,107 | |
| Nov 23, 2009 | 1.52 | = | 42.30 | ÷ | 27.81 | 27.81 | = | 20,915 | ÷ | 752,147,714 | |
| Nov 25, 2008 | 1.07 | = | 34.51 | ÷ | 32.34 | 32.34 | = | 24,807 | ÷ | 767,063,304 | |
| Nov 19, 2007 | 1.87 | = | 53.76 | ÷ | 28.67 | 28.67 | = | 22,572 | ÷ | 787,228,656 | |
| Nov 21, 2006 | 1.77 | = | 44.41 | ÷ | 25.09 | 25.09 | = | 20,133 | ÷ | 802,368,780 | |
| Nov 22, 2005 | 1.74 | = | 36.61 | ÷ | 21.06 | 21.06 | = | 17,305 | ÷ | 821,630,628 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of Emerson Electric Co. Annual Report.
The price-to-sales (P/S) ratio exhibited significant volatility and a distinct structural shift in valuation between 2005 and 2019. For the first decade of the observed period, the ratio generally fluctuated within a range of 1.07 to 1.97, before transitioning to a higher valuation plateau after 2015.
- Early Period Volatility (2005–2015)
- Between 2005 and 2007, the P/S ratio showed a steady increase from 1.74 to 1.87. A sharp contraction occurred in 2008, with the ratio dropping to its period low of 1.07. This decline was driven by a substantial decrease in share price, despite an increase in sales per share during the same year. Following 2008, the ratio recovered and remained relatively stable, oscillating between 1.44 and 1.97 through 2015.
- Valuation Expansion (2016–2019)
- A significant upward shift in the P/S ratio is observed starting in 2016, where the ratio jumped from 1.47 to 2.43. This elevated valuation persisted through 2019, ending the period at 2.42. This represents a marked departure from the historical averages seen in the preceding ten years.
- Divergence of Price and Sales
- A notable divergence occurred in 2016; while sales per share experienced a sharp decline from 34.07 in 2015 to 22.59 in 2016, the share price remained relatively stable, leading to the surge in the P/S ratio. This suggests a market revaluation where the company was assigned a higher multiple per dollar of revenue regardless of the contraction in sales per share.
Overall, the data indicates a long-term trend of valuation expansion. While the early period was characterized by fluctuations tied to share price volatility, the latter period demonstrates a sustained increase in the premium the market was willing to pay relative to the company's sales.
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Comparison to Competitors
Emerson Electric Co., P/S, long-term trends, comparison to competitors
| Emerson Electric Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Nov 18, 2019 | 2.42 | 2.34 | 1.48 | 1.87 | 1.18 | 3.51 | 2.07 | 1.75 |
| Nov 19, 2018 | 2.46 | 2.26 | 1.47 | 1.58 | 0.82 | 2.59 | 1.58 | 1.56 |
| Nov 20, 2017 | 2.53 | 2.17 | 2.24 | 1.74 | 1.11 | 2.74 | 1.91 | 1.67 |
| Nov 16, 2016 | 2.43 | 1.06 | 1.62 | 1.65 | 2.39 | 2.36 | 1.59 | 1.55 |
| Nov 18, 2015 | 1.47 | 0.80 | 0.86 | 1.25 | 2.59 | 2.06 | 1.43 | 1.26 |
| Nov 19, 2014 | 1.81 | 1.15 | 0.99 | 1.49 | 2.45 | 2.03 | 1.34 | 1.67 |
| Nov 19, 2013 | 1.92 | 1.12 | 1.17 | 1.63 | 2.54 | 1.90 | 1.15 | 1.60 |
| Nov 20, 2012 | 1.44 | 0.70 | 0.99 | 1.79 | 2.39 | 1.46 | 0.60 | 1.43 |
| Nov 22, 2011 | 1.47 | 0.82 | 1.30 | 1.08 | 2.15 | 1.28 | 0.62 | 1.31 |
| Nov 23, 2010 | 1.97 | 0.83 | 1.63 | 1.33 | 2.20 | 1.36 | 0.61 | 1.44 |
| Nov 23, 2009 | 1.52 | 0.64 | 1.23 | 0.95 | 1.66 | 0.94 | 0.64 | 1.19 |
| Nov 25, 2008 | 1.07 | 0.51 | 0.33 | 0.39 | 1.02 | 0.66 | 0.64 | 0.77 |
| Nov 19, 2007 | 1.87 | 0.98 | 1.06 | 0.91 | 3.45 | 1.21 | 1.03 | 1.30 |
| Nov 21, 2006 | 1.77 | 1.17 | 1.12 | 0.96 | 3.54 | 1.22 | 1.08 | 1.44 |
| Nov 22, 2005 | 1.74 | 1.06 | 1.44 | 0.93 | 3.72 | 1.24 | 0.86 | 1.36 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Sector (Capital Goods)
Emerson Electric Co., P/S, long-term trends, comparison to sector (capital goods)
| Emerson Electric Co. | Capital Goods | |
|---|---|---|
| Nov 18, 2019 | 2.42 | 1.92 |
| Nov 19, 2018 | 2.46 | 1.62 |
| Nov 20, 2017 | 2.53 | 1.82 |
| Nov 16, 2016 | 2.43 | 1.76 |
| Nov 18, 2015 | 1.47 | 1.55 |
| Nov 19, 2014 | 1.81 | 1.66 |
| Nov 19, 2013 | 1.92 | 1.66 |
| Nov 20, 2012 | 1.44 | 1.37 |
| Nov 22, 2011 | 1.47 | 1.33 |
| Nov 23, 2010 | 1.97 | 1.45 |
| Nov 23, 2009 | 1.52 | 1.12 |
| Nov 25, 2008 | 1.07 | 0.71 |
| Nov 19, 2007 | 1.87 | 1.76 |
| Nov 21, 2006 | 1.77 | 1.91 |
| Nov 22, 2005 | 1.74 | 1.95 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).
Comparison to Industry (Industrials)
Emerson Electric Co., P/S, long-term trends, comparison to industry (industrials)
| Emerson Electric Co. | Industrials | |
|---|---|---|
| Nov 18, 2019 | 2.42 | 1.77 |
| Nov 19, 2018 | 2.46 | 1.58 |
| Nov 20, 2017 | 2.53 | 1.71 |
| Nov 16, 2016 | 2.43 | 1.68 |
| Nov 18, 2015 | 1.47 | 1.48 |
| Nov 19, 2014 | 1.81 | 1.65 |
| Nov 19, 2013 | 1.92 | 1.57 |
| Nov 20, 2012 | 1.44 | 1.31 |
| Nov 22, 2011 | 1.47 | 1.27 |
| Nov 23, 2010 | 1.97 | 1.39 |
| Nov 23, 2009 | 1.52 | 1.09 |
| Nov 25, 2008 | 1.07 | 0.71 |
| Nov 19, 2007 | 1.87 | 1.62 |
| Nov 21, 2006 | 1.77 | 1.73 |
| Nov 22, 2005 | 1.74 | 1.80 |
Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30), 10-K (reporting date: 2013-09-30), 10-K (reporting date: 2012-09-30), 10-K (reporting date: 2011-09-30), 10-K (reporting date: 2010-09-30), 10-K (reporting date: 2009-09-30), 10-K (reporting date: 2008-09-30), 10-K (reporting date: 2007-09-30), 10-K (reporting date: 2006-09-30), 10-K (reporting date: 2005-09-30).