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Common Stock Valuation Ratios (Price Multiples)

Difficulty: Beginner


Current Valuation Ratios

FedEx Corp., current price multiples

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FedEx Corp. CSX Corp. Union Pacific Corp. United Parcel Service Inc. Industrial Transportation Industrials
Selected Financial Data
Current share price (P) $ 201.39
No. shares of common stock outstanding 263,515,857
Growth rate (g) 12.54%
 
Earnings per share (EPS) $ 17.35
Next year expected EPS $ 19.53
Operating profit per share $ 18.48
Sales per share $ 248.37
Book value per share (BVPS) $ 73.68
Ratios (Price Multiples)
Price to earnings (P/E) 11.61 10.50 10.14 18.43 12.85 25.62
Price to next year expected earnings 10.31 9.10 8.57 8.00 10.99 23.35
Price-earnings-growth (PEG) 0.93 0.68 0.55 0.14 0.76 2.64
Price to operating profit (P/OP) 10.90 15.67 13.48 12.02 12.75 14.01
Price to sales (P/S) 0.81 5.04 5.11 1.37 1.95 1.92
Price to book value (P/BV) 2.73 3.91 4.37 90.49 5.47 5.40

Based on: 10-K (filing date: 2018-07-16).

If company price multiple is lower then the price multiple of benchmark then company stock is relatively undervalued.

Otherwise, if company price multiple is higher then the price multiple of benchmark then company stock is relatively overvalued.


Historical Valuation Ratios (Summary)

FedEx Corp., historical price multiples

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May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
Price to earnings (P/E) 13.39 19.29 23.45 46.06 20.56 21.03
Price to operating profit (P/OP) 12.57 11.48 13.87 25.90 12.51 12.87
Price to sales (P/S) 0.94 0.96 0.85 1.02 0.95 0.74
Price to book value (P/BV) 3.15 3.60 3.10 3.23 2.82 1.89

Based on: 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14), 10-K (filing date: 2013-07-15).

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. FedEx Corp.'s P/E ratio declined from 2016 to 2017 and from 2017 to 2018.
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. FedEx Corp.'s P/OP ratio declined from 2016 to 2017 but then slightly increased from 2017 to 2018.
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. FedEx Corp.'s P/S ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.
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. FedEx Corp.'s P/BV ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.

Price to Earnings (P/E)

FedEx Corp., historical P/E calculation, comparison to benchmarks

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May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
No. shares of common stock outstanding1 265,924,840 268,257,434 265,524,323 282,430,208 285,423,144 316,584,465
Selected Financial Data (USD $)
Net income (in millions) 4,572  2,997  1,820  1,050  2,097  1,561 
Earnings per share (EPS)3 17.19 11.17 6.85 3.72 7.35 4.93
Share price1, 2 230.18 215.48 160.76 171.24 151.07 103.70
Ratio
P/E ratio4 13.39 19.29 23.45 46.06 20.56 21.03
Benchmarks
P/E Ratio, Competitors
CSX Corp. 8.59 25.94 11.81 18.47 14.81
Union Pacific Corp. 9.26 20.86 13.31 20.72 18.35
United Parcel Service Inc. 18.37 27.32 17.84 30.28 20.22
P/E Ratio, Sector
Industrial Transportation 12.21 24.04 17.53 22.71 18.82
P/E Ratio, Industry
Industrials 28.48 22.75 23.39 18.71 18.53

Based on: 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14), 10-K (filing date: 2013-07-15).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of FedEx Corp.'s Annual Report.

2018 Calculations

3 EPS = Net income ÷ No. shares of common stock outstanding
= 4,572,000,000 ÷ 265,924,840 = 17.19

4 P/E ratio = Share price ÷ EPS
= 230.18 ÷ 17.19 = 13.39

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. FedEx Corp.'s P/E ratio declined from 2016 to 2017 and from 2017 to 2018.

Price to Operating Profit (P/OP)

FedEx Corp., historical P/OP calculation, comparison to benchmarks

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May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
No. shares of common stock outstanding1 265,924,840 268,257,434 265,524,323 282,430,208 285,423,144 316,584,465
Selected Financial Data (USD $)
Operating income (in millions) 4,870  5,037  3,077  1,867  3,446  2,551 
Operating profit per share3 18.31 18.78 11.59 6.61 12.07 8.06
Share price1, 2 230.18 215.48 160.76 171.24 151.07 103.70
Ratio
P/OP ratio4 12.57 11.48 13.87 25.90 12.51 12.87
Benchmarks
P/OP Ratio, Competitors
CSX Corp. 12.82 13.12 6.48 9.85 7.95
Union Pacific Corp. 12.30 12.14 7.89 12.26 10.81
United Parcel Service Inc. 11.98 17.14 11.27 18.48 12.57
P/OP Ratio, Sector
Industrial Transportation 12.11 14.02 10.46 13.37 11.18
P/OP Ratio, Industry
Industrials 15.57 15.55 12.60 11.54 11.05

Based on: 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14), 10-K (filing date: 2013-07-15).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of FedEx Corp.'s Annual Report.

2018 Calculations

3 Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 4,870,000,000 ÷ 265,924,840 = 18.31

4 P/OP ratio = Share price ÷ Operating profit per share
= 230.18 ÷ 18.31 = 12.57

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. FedEx Corp.'s P/OP ratio declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Price to Sales (P/S)

FedEx Corp., historical P/S calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
No. shares of common stock outstanding1 265,924,840 268,257,434 265,524,323 282,430,208 285,423,144 316,584,465
Selected Financial Data (USD $)
Revenues (in millions) 65,450  60,319  50,365  47,453  45,567  44,287 
Sales per share3 246.12 224.85 189.68 168.02 159.65 139.89
Share price1, 2 230.18 215.48 160.76 171.24 151.07 103.70
Ratio
P/S ratio4 0.94 0.96 0.85 1.02 0.95 0.74
Benchmarks
P/S Ratio, Competitors
CSX Corp. 4.12 4.02 1.97 2.81 2.29
Union Pacific Corp. 4.67 4.43 2.91 4.48 3.67
United Parcel Service Inc. 1.37 1.54 1.48 1.58 1.59
P/S Ratio, Sector
Industrial Transportation 1.85 1.89 1.59 1.98 1.71
P/S Ratio, Industry
Industrials 2.14 1.99 1.73 1.86 1.74

Based on: 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14), 10-K (filing date: 2013-07-15).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of FedEx Corp.'s Annual Report.

2018 Calculations

3 Sales per share = Revenues ÷ No. shares of common stock outstanding
= 65,450,000,000 ÷ 265,924,840 = 246.12

4 P/S ratio = Share price ÷ Sales per share
= 230.18 ÷ 246.12 = 0.94

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. FedEx Corp.'s P/S ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

Price to Book Value (P/BV)

FedEx Corp., historical P/BV calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
May 31, 2018 May 31, 2017 May 31, 2016 May 31, 2015 May 31, 2014 May 31, 2013
No. shares of common stock outstanding1 265,924,840 268,257,434 265,524,323 282,430,208 285,423,144 316,584,465
Selected Financial Data (USD $)
Common stockholders' investment (in millions) 19,416  16,073  13,784  14,993  15,277  17,398 
Book value per share (BVPS)3 73.01 59.92 51.91 53.09 53.52 54.96
Share price1, 2 230.18 215.48 160.76 171.24 151.07 103.70
Ratio
P/BV ratio4 3.15 3.60 3.10 3.23 2.82 1.89
Benchmarks
P/BV Ratio, Competitors
CSX Corp. 3.20 3.81 1.99 3.19 2.63
Union Pacific Corp. 3.99 4.43 3.07 5.07 3.79
United Parcel Service Inc. 90.21 231.41 34.99 42.88 13.65
P/BV Ratio, Sector
Industrial Transportation 5.19 5.88 4.45 5.58 4.13
P/BV Ratio, Industry
Industrials 6.01 5.41 4.16 3.99 3.30

Based on: 10-K (filing date: 2018-07-16), 10-K (filing date: 2017-07-17), 10-K (filing date: 2016-07-18), 10-K (filing date: 2015-07-14), 10-K (filing date: 2014-07-14), 10-K (filing date: 2013-07-15).

1 Data adjusted for splits and stock dividends.

2 Close price on the filing date of FedEx Corp.'s Annual Report.

2018 Calculations

3 BVPS = Common stockholders' investment ÷ No. shares of common stock outstanding
= 19,416,000,000 ÷ 265,924,840 = 73.01

4 P/BV ratio = Share price ÷ BVPS
= 230.18 ÷ 73.01 = 3.15

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. FedEx Corp.'s P/BV ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018 not reaching 2016 level.