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).
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Raytheon Co. pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Current Ratio since 2005
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Current Valuation Ratios
Raytheon Co., current price multiples
| Raytheon Co. | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | ||
|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||
| Current share price (P) | |||||||||
| No. shares of common stock outstanding | |||||||||
| Growth rate (g) | |||||||||
| Earnings per share (EPS) | |||||||||
| Next year expected EPS | |||||||||
| Operating profit per share | |||||||||
| Sales per share | |||||||||
| Book value per share (BVPS) | |||||||||
| Valuation Ratios (Price Multiples) | |||||||||
| Price to earnings (P/E) | |||||||||
| Price to next year expected earnings | |||||||||
| Price-earnings-growth (PEG) | |||||||||
| Price to operating profit (P/OP) | |||||||||
| Price to sales (P/S) | |||||||||
| Price to book value (P/BV) | |||||||||
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)
Raytheon Co., historical price multiples
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| Price to earnings (P/E) | ||||||
| Price to operating profit (P/OP) | ||||||
| Price to sales (P/S) | ||||||
| Price to book value (P/BV) |
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 exhibited fluctuating behavior over the analyzed period. It increased from 18.25 in 2015 to a peak of 30.3 in 2017, indicating heightened market expectations or reduced earnings relative to price. Subsequently, the ratio decreased to 17.56 in 2018, before slightly rising again to 19.14 in 2019. This suggests variability in earnings performance or market sentiment during these years.
- Price to Operating Profit (P/OP) Ratio
- Similar to the P/E ratio, the P/OP ratio showed an upward trend from 12.56 in 2015 to 18.48 in 2017, followed by a marked decline to 11.25 in 2018. The ratio then rose again to 13.4 in 2019. These movements reflect changes in operating profitability in relation to market valuation, with 2017 being a notably high valuation year compared to operating profit.
- Price to Sales (P/S) Ratio
- The P/S ratio steadily increased from 1.63 in 2015 to 2.42 in 2017, indicating growing market valuation relative to sales. Though there was a drop in 2018 to 1.89, the ratio rebounded to 2.19 in 2019. This pattern points to fluctuating investor confidence in sales growth or margin improvements across the time frame.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio followed a trend similar to the other valuation multiples, rising from 3.74 in 2015 to a high of 6.16 in 2017. It then decreased to 4.45 in 2018 and increased again to 5.23 in 2019. This indicates shifts in market valuation relative to the underlying book equity value, with a peak in 2017 suggesting possible overvaluation or improved market perception of asset value at that time.
- Overall Trends and Insights
- Across all valuation ratios, 2017 stands out as a year with significantly higher multiples, suggesting elevated market valuation relative to earnings, operating profits, sales, and book value. The subsequent decline in 2018 across all metrics implies a correction or changed market expectations. The partial recovery in 2019 indicates a stabilization or renewed investor confidence. These patterns point to volatility in market valuation metrics over the five-year period, possibly reflecting changes in company performance, market conditions, or investor sentiment.
Price to Earnings (P/E)
Raytheon Co., 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 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income attributable to Raytheon Company (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| 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 income attributable to Raytheon Company ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Raytheon Co. Annual Report.
4 2019 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated an overall upward trend during the period analyzed. It increased from $126.57 at the end of 2015 to $229.76 by the close of 2019. Notably, the share price peaked at $212.58 in 2017 before experiencing a decline to $180.94 in 2018, followed by a substantial recovery in 2019.
- Earnings Per Share (EPS)
- The earnings per share showed a steady improvement over the five-year span. Starting at $6.94 in 2015, EPS rose to $12.01 by 2019. An increase was observed each year except for a slight drop from $7.55 in 2016 to $7.02 in 2017. A significant growth in EPS occurred in 2018 and continued strongly into 2019, indicating enhanced profitability.
- Price-to-Earnings Ratio (P/E)
- The P/E ratio exhibited variability throughout the period. Beginning at 18.25 in 2015, it increased to a peak of 30.3 in 2017, then dropped sharply to 17.56 in 2018 before rising again to 19.14 in 2019. This fluctuation suggests changing market perceptions of the company's future earnings potential and varying investor sentiment relative to the price movements and earnings growth.
- Overall Insights
- The data indicates a generally positive performance trend with earnings improvement and share price appreciation over the reviewed years. The share price was somewhat volatile, reflecting shifts in market conditions or company-specific factors. The EPS growth, particularly notable in the last two years, may have contributed to restoring investor confidence after the 2017-2018 decline in share price. The P/E ratio’s high point in 2017 suggests peak investor optimism that was corrected in subsequent years. Together, these patterns highlight a company with strengthening financial results and fluctuating market valuation dynamics during the period.
Price to Operating Profit (P/OP)
Raytheon Co., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| 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 income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Raytheon Co. Annual Report.
4 2019 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trends
- The share price exhibited an overall upward trend from 2015 to 2019. Starting at $126.57 in 2015, it increased notably to $151.96 in 2016 and further surged to $212.58 by the end of 2017. Although there was a decline in 2018 to $180.94, the share price rebounded strongly in 2019, reaching a peak of $229.76. This pattern suggests a generally positive market perception with a brief period of correction in 2018.
- Operating Profit Per Share Trends
- Operating profit per share showed consistent growth throughout the five-year period. From $10.08 in 2015, there was a steady increase each year, reaching $11.06 in 2016 and $11.50 in 2017. The growth accelerated in 2018 to $16.08 and continued upward to $17.15 in 2019. This indicates improved operational efficiency or profitability over time.
- Price to Operating Profit Ratio (P/OP) Trends
- The P/OP ratio fluctuated during the period. Starting at 12.56 in 2015, it rose to 13.74 in 2016 and peaked at 18.48 in 2017, reflecting a growing market valuation relative to operating profit per share. The ratio then dropped sharply to 11.25 in 2018, corresponding with the share price decline despite rising profits. It increased again to 13.4 in 2019, which aligns with the recovery in share price and continued profit growth. These dynamics suggest market valuation responded to profitability trends and potentially investor sentiment over the years.
Price to Sales (P/S)
Raytheon Co., historical P/S calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net sales (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| 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 = Net sales ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Raytheon Co. Annual Report.
4 2019 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period ending December 31, 2019.
- Share price
- The share price exhibited an overall upward trend from $126.57 in 2015 to $229.76 in 2019. There was a notable increase from 2015 through 2017, peaking at $212.58. Although the share price declined to $180.94 in 2018, it recovered strongly in 2019, surpassing previous highs.
- Sales per share
- Sales per share consistently increased each year, rising from $77.75 in 2015 to $104.78 in 2019. This steady growth indicates improving revenue performance on a per-share basis throughout the period.
- Price-to-Sales (P/S) Ratio
- The P/S ratio mostly reflected the movements of the share price relative to sales per share. It increased from 1.63 in 2015 to a peak of 2.42 in 2017, followed by a decline to 1.89 in 2018, and then a rise to 2.19 in 2019. The fluctuations suggest variations in market valuation multiples, with the highest market optimism seen in 2017 and a partial recovery thereafter.
Price to Book Value (P/BV)
Raytheon Co., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Raytheon Company stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| 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 = Total Raytheon Company stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Raytheon Co. Annual Report.
4 2019 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price displayed an overall upward trend from 2015 through 2019. It increased significantly from $126.57 at the end of 2015 to $229.76 by the end of 2019. Notably, the share price peaked in 2017 at $212.58 before experiencing a decline in 2018 to $180.94, followed by a recovery in 2019.
- Book Value Per Share (BVPS) Trend
- The book value per share showed a steady increase over the observed period. Starting at $33.87 in 2015, it gradually rose each year, reaching $43.90 in 2019. This indicates a consistent growth in the company’s net asset value on a per-share basis.
- Price to Book Value Ratio (P/BV) Trend
- The price-to-book value ratio followed a volatile pattern. It started at 3.74 in 2015, rose to a peak of 6.16 in 2017, decreased sharply in 2018 to 4.45, and then increased again to 5.23 in 2019. The fluctuations suggest changes in market valuation relative to net asset value, with the valuation reaching its highest premium above book value in 2017.
- General Observations
- The divergence between share price and book value per share movements indicates that market perceptions and investor sentiment contributed significantly to valuation changes, especially around 2017. While the underlying book value grew steadily, the share price experienced more volatility. The P/BV ratio movement reflects these valuation dynamics and suggests periods of varying investor confidence or market conditions affecting the stock's premium over book value.