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
Kinder Morgan Inc., current price multiples
| Kinder Morgan Inc. | Chevron Corp. | ConocoPhillips | ExxonMobil Holdings Corp. | ||
|---|---|---|---|---|---|
| Selected Financial Data | |||||
| Current share price (P) | $15.71 | ||||
| No. shares of common stock outstanding | 2,261,487,090 | ||||
| Growth rate (g) | -31.87% | ||||
| Earnings per share (EPS) | $0.97 | ||||
| Next year expected EPS | $0.66 | ||||
| Operating profit per share | $2.15 | ||||
| Sales per share | $5.84 | ||||
| Book value per share (BVPS) | $14.92 | ||||
| Valuation Ratios (Price Multiples) | |||||
| Price to earnings (P/E) | 16.22 | 34.21 | 20.37 | 23.38 | |
| Price to next year expected earnings | 23.81 | 32.71 | 18.16 | 21.57 | |
| Price to operating profit (P/OP) | 7.29 | 19.78 | 12.02 | 15.95 | |
| Price to sales (P/S) | 2.69 | 2.28 | 2.76 | 2.08 | |
| Price to book value (P/BV) | 1.05 | 2.26 | 2.52 | 2.60 | |
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)
Kinder Morgan 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 from 2015 to 2019 exhibit a divergence between net income-based metrics and operational or asset-based metrics, characterized by extreme volatility in earnings multiples and a gradual correction toward stabilization.
- Price to Earnings (P/E)
- The P/E ratio demonstrated extreme instability throughout the period. A significant peak occurred in 2017, reaching 1,408.61, which suggests a period of severely compressed net income relative to the share price. This was followed by a sharp normalization, with the ratio descending to 27.54 in 2018 and further to 22.56 by 2019.
- Price to Operating Profit (P/OP)
- In contrast to the P/E ratio, the P/OP ratio followed a consistent downward trajectory, moving from 14.24 in 2015 to 10.14 in 2019. This steady decline indicates that while net earnings were volatile, the valuation relative to operating profit remained more stable and gradually compressed.
- Price to Sales (P/S)
- The P/S ratio showed a fluctuating pattern without a definitive linear trend. After an initial increase from 2.42 in 2015 to 3.84 in 2016, the ratio dipped to 2.78 in 2017 before recovering to 3.74 by 2019.
- Price to Book Value (P/BV)
- An overall upward trend is observed in the P/BV ratio. The company transitioned from trading slightly below its book value (0.99) in 2015 to trading at a premium of 1.46 by 2019, signaling an increase in the market's valuation of the company's net assets over the five-year interval.
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Price to Earnings (P/E)
Kinder Morgan 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 | 2,265,063,459 | 2,263,656,419 | 2,206,066,684 | 2,232,438,943 | 2,231,555,976 | |
| Selected Financial Data (US$) | ||||||
| Net income available to common stockholders (in millions) | 2,190) | 1,481) | 27) | 552) | 227) | |
| Earnings per share (EPS)2 | 0.97 | 0.65 | 0.01 | 0.25 | 0.10 | |
| Share price1, 3 | 21.81 | 18.02 | 17.24 | 22.48 | 15.62 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 22.56 | 27.54 | 1,408.61 | 90.92 | 153.55 | |
| 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 available to common stockholders ÷ No. shares of common stock outstanding
= 2,190,000,000 ÷ 2,265,063,459 = 0.97
3 Closing price as at the filing date of Kinder Morgan Inc. Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= 21.81 ÷ 0.97 = 22.56
5 Click competitor name to see calculations.
The valuation metrics between 2015 and 2019 reflect a transition from extreme volatility toward a stabilized valuation profile. While share prices experienced fluctuations, the primary driver of the price multiples was the significant variability in earnings per share during the first three years of the period.
- Share Price and Earnings per Share (EPS) Trends
- Share prices followed a general upward trajectory, increasing from US$15.62 in 2015 to US$21.81 in 2019. Earnings per share exhibited higher volatility, starting at US$0.10, experiencing a sharp decline to US$0.01 in 2017, and subsequently recovering to reach a peak of US$0.97 by the end of 2019.
- Price-to-Earnings (P/E) Ratio Analysis
- The P/E ratio demonstrated extreme instability from 2015 to 2017, reaching an anomaly of 1,408.61 in 2017. This peak was a mathematical consequence of the EPS nearly reaching zero, rather than an indicator of market overvaluation. A significant normalization occurred in 2018 and 2019, with the ratio contracting to 27.54 and 22.56, respectively. This downward trend indicates a alignment between market price and fundamental earnings as profitability improved.
- Overall Valuation Convergence
- By the end of the observed period, the relationship between share price and earnings shifted from a speculative or distressed state to a more conventional valuation. The reduction of the P/E ratio from triple and quadruple digits to a range of 22-27 suggests a maturation of the company's earnings capacity and a more objective market pricing mechanism.
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Price to Operating Profit (P/OP)
Kinder Morgan Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 2,265,063,459 | 2,263,656,419 | 2,206,066,684 | 2,232,438,943 | 2,231,555,976 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 4,873) | 3,794) | 3,544) | 3,572) | 2,447) | |
| Operating profit per share2 | 2.15 | 1.68 | 1.61 | 1.60 | 1.10 | |
| Share price1, 3 | 21.81 | 18.02 | 17.24 | 22.48 | 15.62 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 10.14 | 10.75 | 10.73 | 14.05 | 14.24 | |
| 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 ÷ No. shares of common stock outstanding
= 4,873,000,000 ÷ 2,265,063,459 = 2.15
3 Closing price as at the filing date of Kinder Morgan Inc. Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 21.81 ÷ 2.15 = 10.14
5 Click competitor name to see calculations.
Between 2015 and 2019, a divergence is observed between the growth of operating profitability and the valuation multiple applied to the equity. While operating profit per share expanded consistently, the price-to-operating profit (P/OP) ratio experienced a sustained decline over the period.
- Operating Profitability Trends
- Operating profit per share demonstrated consistent year-over-year growth, rising from US$ 1.10 in 2015 to US$ 2.15 in 2019. Significant gains were noted between 2015 and 2016, and again in the final year of the analysis, indicating a strengthening of the fundamental earning power per share.
- Share Price Volatility
- The share price exhibited a more volatile trajectory than the operating profit. After increasing from US$ 15.62 in 2015 to a peak of US$ 22.48 in 2016, the price experienced a correction to US$ 17.24 in 2017. A gradual recovery followed, with the price reaching US$ 21.81 by December 31, 2019.
- P/OP Ratio and Valuation Compression
- The P/OP ratio reflects a clear trend of valuation compression. The ratio began at 14.24 in 2015 and remained stable through 2016, but declined sharply to 10.73 in 2017. Despite the recovery in share price in subsequent years, the ratio continued to trend downward, ending at 10.14 in 2019. This pattern indicates that the growth in operating profit outpaced the growth in market price, leading to a lower valuation multiple despite improved operational performance.
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Price to Sales (P/S)
Kinder Morgan 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 | 2,265,063,459 | 2,263,656,419 | 2,206,066,684 | 2,232,438,943 | 2,231,555,976 | |
| Selected Financial Data (US$) | ||||||
| Revenues (in millions) | 13,209) | 14,144) | 13,705) | 13,058) | 14,403) | |
| Sales per share2 | 5.83 | 6.25 | 6.21 | 5.85 | 6.45 | |
| Share price1, 3 | 21.81 | 18.02 | 17.24 | 22.48 | 15.62 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 3.74 | 2.88 | 2.78 | 3.84 | 2.42 | |
| 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 = Revenues ÷ No. shares of common stock outstanding
= 13,209,000,000 ÷ 2,265,063,459 = 5.83
3 Closing price as at the filing date of Kinder Morgan Inc. Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= 21.81 ÷ 5.83 = 3.74
5 Click competitor name to see calculations.
The valuation metrics from 2015 to 2019 exhibit significant volatility in the Price to Sales (P/S) ratio, which is closely correlated with fluctuations in the share price while sales per share remained relatively stagnant.
- Price to Sales (P/S) Trend
- The P/S ratio experienced substantial variance over the five-year period. After starting at 2.42 in 2015, the ratio rose sharply to 3.84 in 2016, followed by a correction to 2.78 in 2017. A gradual recovery occurred in 2018 at 2.88, culminating in a second peak of 3.74 by the end of 2019.
- Sales per Share Performance
- Revenue generation per share displayed a lack of a consistent growth trajectory. Sales per share declined from 6.45 in 2015 to 5.85 in 2016, recovered slightly to 6.25 by 2018, and then retreated to 5.83 in 2019. The absence of a strong upward or downward trend in sales per share suggests that operational revenue levels remained stable relative to the number of shares outstanding.
- Share Price Influence
- The share price acted as the primary driver for the valuation multiples. The spikes in the P/S ratio in 2016 and 2019 correspond directly with peaks in the share price of 22.48 and 21.81, respectively. Conversely, the decline in the P/S ratio in 2017 aligns with the share price drop to 17.24, indicating that market sentiment and equity pricing had a more pronounced impact on the valuation than operational sales performance.
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Price to Book Value (P/BV)
Kinder Morgan 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 | 2,265,063,459 | 2,263,656,419 | 2,206,066,684 | 2,232,438,943 | 2,231,555,976 | |
| Selected Financial Data (US$) | ||||||
| Total Kinder Morgan, Inc.’s stockholders’ equity (in millions) | 33,742) | 33,678) | 33,636) | 34,431) | 35,119) | |
| Book value per share (BVPS)2 | 14.90 | 14.88 | 15.25 | 15.42 | 15.74 | |
| Share price1, 3 | 21.81 | 18.02 | 17.24 | 22.48 | 15.62 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 1.46 | 1.21 | 1.13 | 1.46 | 0.99 | |
| 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 = Total Kinder Morgan, Inc.’s stockholders’ equity ÷ No. shares of common stock outstanding
= 33,742,000,000 ÷ 2,265,063,459 = 14.90
3 Closing price as at the filing date of Kinder Morgan Inc. Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= 21.81 ÷ 14.90 = 1.46
5 Click competitor name to see calculations.
Between 2015 and 2019, the valuation of common stock relative to its book value exhibited significant volatility, characterized by a transition from a trading discount to a sustained premium. The movements in the price-to-book value ratio were primarily driven by fluctuations in the market share price, as the underlying book value per share remained relatively stable.
- Share Price Dynamics
- The share price experienced a sharp increase from $15.62 in 2015 to a peak of $22.48 in 2016. After a correction to $17.24 in 2017, a recovery trend is observed, with the price rising to $18.02 in 2018 and reaching $21.81 by the end of 2019.
- Book Value Per Share (BVPS) Trend
- A consistent, gradual decline in BVPS is observed over the five-year period. The value decreased from $15.74 in 2015 to $14.90 in 2019, indicating a slight erosion of the accounting value of equity per share.
- Price to Book Value (P/BV) Analysis
- The P/BV ratio shifted from 0.99 in 2015, indicating the stock was trading below its book value, to 1.46 in 2016. Although the ratio contracted to 1.13 in 2017, it trended upward over the final two years, returning to 1.46 by December 31, 2019. This pattern suggests an increase in the market premium attributed to the company's assets compared to the 2015 baseline.
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