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
General Dynamics Corp., current price multiples
| General Dynamics Corp. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | ||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Current share price (P) | $132.43 | ||||||||
| No. shares of common stock outstanding | 286,972,150 | ||||||||
| Growth rate (g) | 18.26% | ||||||||
| Earnings per share (EPS) | $12.14 | ||||||||
| Next year expected EPS | $14.36 | ||||||||
| Operating profit per share | $16.20 | ||||||||
| Sales per share | $137.12 | ||||||||
| Book value per share (BVPS) | $47.31 | ||||||||
| Valuation Ratios (Price Multiples) | |||||||||
| Price to earnings (P/E) | 10.91 | — | 16.79 | 36.43 | 41.40 | 25.78 | 20.14 | 40.48 | |
| Price to next year expected earnings | 9.22 | — | 13.43 | 34.16 | 40.79 | 22.41 | 14.04 | 39.90 | |
| Price-earnings-growth (PEG) | 0.60 | — | 0.67 | 5.49 | 27.81 | 1.71 | 0.46 | 27.96 | |
| Price to operating profit (P/OP) | 8.18 | — | 13.86 | 29.84 | 33.18 | 19.77 | 15.32 | 29.56 | |
| Price to sales (P/S) | 0.97 | 2.43 | 2.95 | 5.56 | 7.73 | 3.82 | 1.51 | 2.39 | |
| Price to book value (P/BV) | 2.80 | — | 9.30 | 7.48 | 14.03 | 7.90 | 16.97 | 3.21 | |
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)
General Dynamics Corp., 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).
- Price to earnings (P/E) ratio
- The P/E ratio demonstrated an overall increasing trend from 2015 to 2017, rising from 13.88 to a peak of 21.37. This suggests investors were willing to pay more for each dollar of earnings, possibly due to expectations of future growth or improved profitability prospects. However, in 2018, the ratio declined sharply to 14.95 and then slightly increased to 15.48 in 2019, indicating a moderation in growth expectations or a normalization of earnings valuation.
- Price to operating profit (P/OP) ratio
- The P/OP ratio followed a pattern similar to the P/E ratio, increasing steadily from 9.85 in 2015 to a high of 14.9 in 2017. This upward movement indicates a rising valuation relative to operating profit, which may reflect investor optimism about the company's operational efficiency or profitability growth. Subsequently, the ratio decreased to 11.22 in 2018 and slightly recovered to 11.61 in 2019, suggesting a recalibration of the market valuation relative to operating earnings.
- Price to sales (P/S) ratio
- The P/S ratio saw growth from 1.31 in 2015 to 2.01 in 2017, showing that the market placed increasing value on the company's sales over this period. This could imply expectations of expanding sales volumes or improving margins. However, a notable drop occurred in 2018, with the ratio falling to 1.38 and remaining nearly flat in 2019 at 1.37, which might reflect stabilization or a diminished growth outlook in sales valuation.
- Price to book value (P/BV) ratio
- The P/BV ratio rose from 3.83 in 2015 to a peak of 5.44 in 2017, indicating a period during which investors were willing to pay a higher premium relative to the book value of the company's assets. This premium might be attributed to perceived intangible assets or growth potential. The ratio then declined to 4.26 in 2018 and further to 3.97 in 2019, pointing to a normalization or reduced market confidence in asset-based valuations.
Price to Earnings (P/E)
General Dynamics Corp., 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 | 289,627,333 | 288,235,928 | 296,933,621 | 302,742,234 | 311,161,810 | |
| Selected Financial Data (US$) | ||||||
| Net earnings (in millions) | 3,484) | 3,345) | 2,912) | 2,955) | 2,965) | |
| Earnings per share (EPS)2 | 12.03 | 11.61 | 9.81 | 9.76 | 9.53 | |
| Share price1, 3 | 186.25 | 173.48 | 209.53 | 183.04 | 132.26 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 15.48 | 14.95 | 21.37 | 18.75 | 13.88 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | — | — | — | — | — | |
| Eaton Corp. plc | — | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | — | — | — | — | — | |
| Lockheed Martin Corp. | — | — | — | — | — | |
| RTX 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 earnings ÷ No. shares of common stock outstanding
= 3,484,000,000 ÷ 289,627,333 = 12.03
3 Closing price as at the filing date of General Dynamics Corp. Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= 186.25 ÷ 12.03 = 15.48
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a notable increase from 132.26 US$ in 2015 to a peak of 209.53 US$ in 2017. However, this upward trend was followed by a decline to 173.48 US$ in 2018, before partially recovering to 186.25 US$ in 2019. Overall, the share price demonstrates volatility with a general increase over the five-year period.
- Earnings per Share (EPS)
- The EPS showed a steady and consistent upward trend throughout the five years, rising from 9.53 US$ in 2015 to 12.03 US$ in 2019. This indicates ongoing improvement in profitability on a per-share basis, with the most significant increase observed between 2017 and 2018.
- Price to Earnings (P/E) Ratio
- The P/E ratio rose sharply from 13.88 in 2015 to a high of 21.37 in 2017, reflecting an increase in the share price relative to earnings during this period. After 2017, the P/E ratio declined substantially to 14.95 in 2018 and modestly increased to 15.48 in 2019. This suggests that after 2017, the market valuation became more aligned with the earnings performance, possibly reflecting a market correction following the earlier price surge.
Price to Operating Profit (P/OP)
General Dynamics Corp., 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 | 289,627,333 | 288,235,928 | 296,933,621 | 302,742,234 | 311,161,810 | |
| Selected Financial Data (US$) | ||||||
| Operating earnings (in millions) | 4,648) | 4,457) | 4,177) | 4,309) | 4,178) | |
| Operating profit per share2 | 16.05 | 15.46 | 14.07 | 14.23 | 13.43 | |
| Share price1, 3 | 186.25 | 173.48 | 209.53 | 183.04 | 132.26 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 11.61 | 11.22 | 14.90 | 12.86 | 9.85 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | — | — | — | — | — | |
| Eaton Corp. plc | — | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | — | — | — | — | — | |
| Lockheed Martin Corp. | — | — | — | — | — | |
| RTX 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 earnings ÷ No. shares of common stock outstanding
= 4,648,000,000 ÷ 289,627,333 = 16.05
3 Closing price as at the filing date of General Dynamics Corp. Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 186.25 ÷ 16.05 = 11.61
5 Click competitor name to see calculations.
- Share Price
- The share price experienced an overall upward trend from 2015 to 2019, increasing from $132.26 to $186.25. The highest value was recorded in 2017 at $209.53, followed by a decline in 2018 to $173.48, and a subsequent partial recovery in 2019.
- Operating Profit Per Share
- Operating profit per share demonstrated a steady increase throughout the period, rising from $13.43 in 2015 to $16.05 in 2019. This indicates consistent improvement in operating profitability on a per-share basis over the five years.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio initially increased from 9.85 in 2015 to a peak of 14.9 in 2017, suggesting that the market valuation grew faster than operating profit per share during this time. However, the ratio declined significantly in 2018 to 11.22 and remained relatively stable, slightly increasing to 11.61 in 2019. This reflects a market adjustment where the share price growth slowed relative to operating profitability improvements.
Price to Sales (P/S)
General Dynamics Corp., historical P/S calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 289,627,333 | 288,235,928 | 296,933,621 | 302,742,234 | 311,161,810 | |
| Selected Financial Data (US$) | ||||||
| Revenue (in millions) | 39,350) | 36,193) | 30,973) | 31,353) | 31,469) | |
| Sales per share2 | 135.86 | 125.57 | 104.31 | 103.56 | 101.13 | |
| Share price1, 3 | 186.25 | 173.48 | 209.53 | 183.04 | 132.26 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 1.37 | 1.38 | 2.01 | 1.77 | 1.31 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | — | — | — | — | — | |
| Eaton Corp. plc | — | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | — | — | — | — | — | |
| Lockheed Martin Corp. | — | — | — | — | — | |
| RTX 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 = Revenue ÷ No. shares of common stock outstanding
= 39,350,000,000 ÷ 289,627,333 = 135.86
3 Closing price as at the filing date of General Dynamics Corp. Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= 186.25 ÷ 135.86 = 1.37
5 Click competitor name to see calculations.
- Share Price
- The share price experienced an overall upward trend from 2015 to 2019, starting at $132.26 in 2015 and reaching a peak of $209.53 in 2017. However, after this peak, there was a decline to $173.48 in 2018, followed by a moderate recovery to $186.25 in 2019. This pattern indicates a period of significant growth up to 2017, a correction in 2018, and partial recovery in the following year.
- Sales per Share
- Sales per share demonstrated steady growth throughout the period, increasing from $101.13 in 2015 to $135.86 in 2019. The most notable increase took place between 2017 and 2018, where sales per share rose sharply from $104.31 to $125.57, continuing its upward trajectory into 2019. This consistent growth suggests improving revenue generation on a per-share basis.
- Price-to-Sales Ratio (P/S)
- The price-to-sales ratio showed variability over the years. It rose significantly from 1.31 in 2015 to a high of 2.01 in 2017, reflecting increasing market valuation relative to sales at that time. Subsequently, the P/S ratio dropped to 1.38 in 2018 and slightly declined further to 1.37 in 2019. The decline in the ratio, despite growing sales per share, aligns with the observed decrease in share price, indicating a relative market valuation adjustment.
Price to Book Value (P/BV)
General Dynamics Corp., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 289,627,333 | 288,235,928 | 296,933,621 | 302,742,234 | 311,161,810 | |
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (in millions) | 13,577) | 11,732) | 11,435) | 10,976) | 10,738) | |
| Book value per share (BVPS)2 | 46.88 | 40.70 | 38.51 | 36.26 | 34.51 | |
| Share price1, 3 | 186.25 | 173.48 | 209.53 | 183.04 | 132.26 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 3.97 | 4.26 | 5.44 | 5.05 | 3.83 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | — | — | — | — | — | |
| Eaton Corp. plc | — | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | — | — | — | — | — | |
| Lockheed Martin Corp. | — | — | — | — | — | |
| RTX 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 = Shareholders’ equity ÷ No. shares of common stock outstanding
= 13,577,000,000 ÷ 289,627,333 = 46.88
3 Closing price as at the filing date of General Dynamics Corp. Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= 186.25 ÷ 46.88 = 3.97
5 Click competitor name to see calculations.
The financial data presents key metrics related to the market valuation and book value of the company over a five-year period ending in 2019. Observations focus on the share price, book value per share (BVPS), and the price-to-book value (P/BV) ratio.
- Share Price
- The share price experienced a general upward trend from 2015 to 2017, increasing from $132.26 to $209.53. However, in 2018, there was a noticeable decline to $173.48, followed by a moderate recovery to $186.25 in 2019. This pattern indicates some volatility in market perception or external factors affecting investor confidence during this period.
- Book Value per Share (BVPS)
- The BVPS showed a consistent year-over-year increase throughout the entire timeframe, moving from $34.51 in 2015 to $46.88 in 2019. This steady growth reflects an overall increase in the company's net asset value on a per-share basis, suggesting ongoing value creation at the balance sheet level.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio rose significantly from 3.83 in 2015 to a peak of 5.44 in 2017, indicating that the market price increased at a faster rate than the book value per share during these years. Following this peak, the ratio declined to 4.26 in 2018 and then further to 3.97 in 2019. The reduction in P/BV suggests a relative decrease in market valuation compared to book value, potentially due to the drop and subsequent modest recovery in share price, despite continuous growth in book value.