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
Procter & Gamble Co., current price multiples
| Procter & Gamble Co. | Consumer Staples | ||
|---|---|---|---|
| Selected Financial Data | |||
| Current share price (P) | $157.05 | ||
| No. shares of common stock outstanding | 2,344,542,034 | ||
| Growth rate (g) | 11.73% | ||
| Earnings per share (EPS) | $6.23 | ||
| Next year expected EPS | $6.96 | ||
| Operating profit per share | $7.91 | ||
| Sales per share | $35.84 | ||
| Book value per share (BVPS) | $21.45 | ||
| Valuation Ratios (Price Multiples) | |||
| Price to earnings (P/E) | 25.23 | 33.37 | |
| Price to next year expected earnings | 22.58 | 29.98 | |
| Price-earnings-growth (PEG) | 2.15 | 2.95 | |
| Price to operating profit (P/OP) | 19.85 | 23.77 | |
| Price to sales (P/S) | 4.38 | 1.89 | |
| Price to book value (P/BV) | 7.32 | 10.70 | |
Based on: 10-K (reporting date: 2024-06-30).
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)
Procter & Gamble Co., historical price multiples
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
The data reveals several noteworthy trends in valuation ratios over the five-year period ending June 30, 2024.
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibited a sharp decline from 78.69 in 2019 to a much lower level of approximately 25 in 2020, followed by a relatively stable range fluctuating slightly between 23.91 and 27.11 from 2021 through 2024. This indicates that the market significantly adjusted its earnings expectations or valuation multiples after 2019 and then maintained a more consistent assessment of earnings value in the subsequent years.
- Price to Operating Profit (P/OP) Ratio
- A similar pattern to the P/E ratio is observed with the P/OP ratio. It dropped from 52.12 in 2019 to about 19-21 range in later years, reflecting a substantial reduction in price multiples relative to operating profit. From 2020 onward, the ratio remained relatively steady with a marginal increasing trend from 19.08 in 2021 to 21.33 in 2024, suggesting increased investor confidence or improved operating profitability relative to price.
- Price to Sales (P/S) Ratio
- The P/S ratio showed a moderate upward trend following an initial rise from 4.22 in 2019 to 4.65 in 2020, dipping slightly in 2021 and 2022, and then increasing again to 4.71 by 2024. This pattern implies steady growth or valuation in relation to sales revenue, albeit with limited volatility compared to earnings-based ratios.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio consistently increased from 6.06 in 2019 to 7.87 in 2024, indicating a growing premium of market price over the book value of equity. This trend reflects either rising market valuation of the company’s net assets or improvements in asset quality and profitability expectations.
Overall, the financial ratios suggest a material re-rating of the company's earnings and operating profit valuation multiples between 2019 and 2020, followed by a period of relative stability with slight upward tendencies in valuation multiples related to sales and book value. The steady increase in Price to Book Value and moderately rising Price to Sales ratios indicate improving investor perception of the company’s underlying asset value and revenue-generating capacity.
Price to Earnings (P/E)
Procter & Gamble Co., historical P/E calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
EPS = Net earnings attributable to P&G available to common shareholders ÷ No. shares of common stock outstanding
= 14,595,000,000 ÷ 2,354,050,987 = 6.20
3 Closing price as at the filing date of Procter & Gamble Co. Annual Report.
4 2024 Calculation
P/E ratio = Share price ÷ EPS
= 168.06 ÷ 6.20 = 27.11
The share price shows a consistent upward trajectory over the analyzed period, rising from $114.28 in 2019 to $168.06 in 2024. This indicates growing market confidence and valuation of the company’s stock over time.
Earnings per share (EPS) experienced a significant increase between 2019 and 2020, surging from $1.45 to $5.13. Following this substantial jump, EPS continued to rise gradually each year, reaching $6.20 by 2024. This pattern suggests improved profitability and operational performance after 2019, with steady growth in earnings per share thereafter.
The price-to-earnings (P/E) ratio declined sharply from 78.69 in 2019 to around the mid-20s in subsequent years, stabilizing between approximately 23.91 and 27.11 from 2021 onward. The initial high ratio in 2019 likely reflected relatively low earnings compared to the share price, while the subsequent drop corresponds to the rapid increase in EPS. The relative stability of the P/E ratio after 2021 suggests that the market valuation has normalized in line with earnings growth.
In summary, the data reflects a financial progression wherein earnings improved substantially leading to a more balanced and sustainable market valuation. The steady increase in share price alongside growing EPS and a stabilized P/E ratio points to enhanced investor confidence and consistent underlying financial health over the time frame.
Price to Operating Profit (P/OP)
Procter & Gamble Co., historical P/OP calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 18,545,000,000 ÷ 2,354,050,987 = 7.88
3 Closing price as at the filing date of Procter & Gamble Co. Annual Report.
4 2024 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 168.06 ÷ 7.88 = 21.33
The analysis of the financial data over the period from June 30, 2019, to June 30, 2024, reveals several noteworthy trends regarding the share price, operating profit per share, and the price-to-operating-profit (P/OP) ratio.
- Share Price
- The share price exhibited a consistent upward trend throughout the period under review. Beginning at $114.28 in mid-2019, it increased steadily each year, reaching $168.06 by mid-2024. This represents significant growth, indicating positive market sentiment and potentially improving company value over the five-year span.
- Operating Profit Per Share
- Operating profit per share showed marked improvement from 2019 to 2020, jumping from $2.19 to $6.32, a substantial increase. Following this, the growth continued but at a slower pace, rising gradually to $7.88 by 2024. This pattern suggests that the company achieved a significant operational performance boost early in the period, maintaining incremental gains subsequently.
- Price-to-Operating-Profit (P/OP) Ratio
- The P/OP ratio experienced a sharp decline from 52.12 in 2019 to 21.01 in 2020, reflecting the dramatic increase in operating profit per share that outpaced the share price growth. After 2020, the ratio stabilized, fluctuating slightly between 19.08 and 21.33. This relative stability in the P/OP ratio, despite rising share prices and operating profits, suggests that the market valuation became more aligned with the company's profitable operations over time.
Overall, the data indicates an improving financial performance with the company achieving higher profitability per share and sustained growth in market valuation. The initial sharp increase in operating profit per share and the corresponding normalization of the P/OP ratio imply enhanced operational efficiency or successful strategic initiatives during this period. The steady increase in the share price further reinforces positive investor confidence.
Price to Sales (P/S)
Procter & Gamble Co., historical P/S calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 84,039,000,000 ÷ 2,354,050,987 = 35.70
3 Closing price as at the filing date of Procter & Gamble Co. Annual Report.
4 2024 Calculation
P/S ratio = Share price ÷ Sales per share
= 168.06 ÷ 35.70 = 4.71
- Share Price Trend
- The share price exhibited a consistent upward trajectory over the analyzed period. Starting at $114.28 on June 30, 2019, it increased each year, reaching $168.06 by June 30, 2024. Notably, the share price growth accelerated particularly after June 2022, reflecting a positive market perception and increased investor confidence.
- Sales per Share Trend
- Sales per share demonstrated a steady increase throughout the periods. From $27.05 in mid-2019, it rose to $35.70 by mid-2024. This consistent growth indicates strengthening revenue generation relative to the number of shares outstanding, suggesting the company's ability to enhance operational performance and revenue scale over time.
- Price-to-Sales (P/S) Ratio Analysis
- The P/S ratio showed some fluctuation but generally maintained an upward trend over the years. It started at 4.22 in 2019, peaked at 4.65 in 2020, dipped slightly to 4.31 in 2022, and then increased again to 4.71 in 2024. The fluctuating P/S ratio, combined with rising share prices and sales per share, indicates variations in market valuation relative to sales, potentially influenced by changing market conditions or investor expectations about future growth and profitability.
- Overall Insights
- The data collectively indicates a positive growth narrative with rising share price and sales per share underpinning operational strength. The P/S ratio's slight fluctuations amidst this upward trend suggest that while the company is valued increasingly higher in relation to its sales, there are intermittent market adjustments or sentiment shifts. This pattern reflects solid financial performance coupled with periods of market recalibration.
Price to Book Value (P/BV)
Procter & Gamble Co., historical P/BV calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Data adjusted for splits and stock dividends.
2 2024 Calculation
BVPS = Shareholders’ equity attributable to Procter & Gamble ÷ No. shares of common stock outstanding
= 50,287,000,000 ÷ 2,354,050,987 = 21.36
3 Closing price as at the filing date of Procter & Gamble Co. Annual Report.
4 2024 Calculation
P/BV ratio = Share price ÷ BVPS
= 168.06 ÷ 21.36 = 7.87
- Share Price Trend
- The share price has exhibited a consistent upward trajectory from June 30, 2019, through June 30, 2024. It increased from $114.28 in mid-2019 to $168.06 by mid-2024, reflecting strong market confidence and positive investor sentiment. The growth was particularly steady, with no observed declines across the periods.
- Book Value Per Share (BVPS) Trend
- The book value per share showed a relatively modest but steady increase over the same five-year span. Starting at $18.86 in 2019, it gradually rose to $21.36 by 2024. This gradual appreciation suggests incremental growth in the company’s net asset value on a per-share basis, indicating ongoing reinvestment or retained earnings growth.
- Price-to-Book Value Ratio (P/BV)
- The P/BV ratio increased from 6.06 in 2019 to 7.87 in 2024. This rising ratio indicates that the market price per share has been growing at a faster rate than the book value per share. The increasing premium investors are willing to pay over the book value suggests expectations of future earnings growth, brand strength, or other intangibles not captured by book value alone.
- Overall Insights
- The data reveals a strong positive trend in market valuation relative to the company’s underlying book assets. While the book value per share growth was steady but moderate, the share price growth was more pronounced, leading to a higher valuation multiple over time. This pattern is indicative of sustained investor confidence and potentially optimistic forecasts for the company’s future performance and profitability.