Price to Operating Profit (P/OP)
since 2005
Calculation
National Oilwell Varco Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating profit (loss)1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 19, 2016 | — | = | 29.30 | ÷ | -1.04 | -1.04 | = | -390 | ÷ | 375,800,956 | |
| Feb 17, 2015 | 6.26 | = | 55.13 | ÷ | 8.81 | 8.81 | = | 3,613 | ÷ | 409,935,076 | |
| Feb 14, 2014 | 9.57 | = | 76.42 | ÷ | 7.99 | 7.99 | = | 3,423 | ÷ | 428,526,178 | |
| Feb 22, 2013 | 8.17 | = | 68.10 | ÷ | 8.34 | 8.34 | = | 3,557 | ÷ | 426,639,780 | |
| Feb 23, 2012 | 12.46 | = | 86.23 | ÷ | 6.92 | 6.92 | = | 2,937 | ÷ | 424,224,491 | |
| Feb 23, 2011 | 13.66 | = | 79.39 | ÷ | 5.81 | 5.81 | = | 2,447 | ÷ | 421,070,856 | |
| Feb 26, 2010 | 7.86 | = | 43.47 | ÷ | 5.53 | 5.53 | = | 2,315 | ÷ | 418,452,756 | |
| Mar 2, 2009 | 3.43 | = | 23.97 | ÷ | 6.99 | 6.99 | = | 2,918 | ÷ | 417,375,125 | |
| Feb 29, 2008 | 10.88 | = | 62.30 | ÷ | 5.73 | 5.73 | = | 2,044 | ÷ | 356,988,724 | |
| Feb 27, 2007 | 10.73 | = | 33.91 | ÷ | 3.16 | 3.16 | = | 1,111 | ÷ | 351,607,276 | |
| Mar 6, 2006 | 21.93 | = | 29.92 | ÷ | 1.36 | 1.36 | = | 477 | ÷ | 349,441,532 |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$
2 Data adjusted for splits and stock dividends.
3 Closing price as at the filing date of National Oilwell Varco Inc. Annual Report.
- Share Price Trends
- The share price exhibits significant volatility over the examined period. Initially, it increased steadily from $29.92 in 2006 to a peak of $86.23 in 2012. Following this peak, there was a notable decline, with the share price dropping to $29.30 by early 2016. This indicates substantial fluctuations in market valuation, with a peak occurring around 2012 followed by a pronounced downward trend.
- Operating Profit Per Share (OPPS) Trends
- Operating profit per share showed a general upward trend from 2006 through 2015, increasing from $1.36 in 2006 to a high of $8.81 in 2015. This consistent growth suggests improving operational efficiency or profitability over this timeframe. However, a sharp decline occurred in 2016, with OPPS falling to a negative value of -$1.04, indicating a significant operational loss during that year.
- Price to Operating Profit Ratio (P/OP) Analysis
- The P/OP ratio demonstrates considerable variability, reflecting changing market sentiment relative to operating earnings. It started high at 21.93 in 2006, decreased markedly to lows around 3.43 in 2009, and then fluctuated between approximately 6.26 and 13.66 in the following years. The last available value is missing, likely due to the negative operating profit per share in 2016 which renders the ratio undefined. The low P/OP ratio in 2009 suggests the share price was low relative to operating profit, possibly due to market conditions, while higher ratios in later years indicate higher valuations relative to operating earnings prior to the 2016 downturn.
- General Observations
- The data reveals a correlation between share price movements and operating profit per share trends over the years, with both rising until the early 2010s and declining sharply by 2016. The sharp negative turn in operating profit per share in 2016 is a critical point indicating operational challenges. The P/OP ratio further highlights shifting investor valuations in relation to these earnings, with more conservative valuations in some years and heightened optimism in others.