Price to Book Value (P/BV)
since 2005
Calculation
Reynolds American Inc., P/BV, long-term trends, calculation
| P/BV | = | Share price1, 2, 3 | ÷ | Book value per share1 (BVPS) | BVPS1 | = | Shareholders’ equity1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 9, 2017 | 3.98 | = | 60.54 | ÷ | 15.23 | 15.23 | = | 21,711 | ÷ | 1,425,934,305 | |
| Feb 11, 2016 | 3.79 | = | 48.50 | ÷ | 12.79 | 12.79 | = | 18,252 | ÷ | 1,427,341,341 | |
| Feb 10, 2015 | 8.26 | = | 35.15 | ÷ | 4.26 | 4.26 | = | 4,522 | ÷ | 1,062,567,026 | |
| Feb 11, 2014 | 5.00 | = | 24.04 | ÷ | 4.81 | 4.81 | = | 5,167 | ÷ | 1,073,894,304 | |
| Feb 12, 2013 | 4.62 | = | 21.97 | ÷ | 4.75 | 4.75 | = | 5,257 | ÷ | 1,105,896,384 | |
| Feb 15, 2012 | 3.72 | = | 20.19 | ÷ | 5.42 | 5.42 | = | 6,251 | ÷ | 1,152,284,476 | |
| Feb 23, 2011 | 3.06 | = | 17.11 | ÷ | 5.58 | 5.58 | = | 6,510 | ÷ | 1,166,101,052 | |
| Feb 19, 2010 | 2.36 | = | 13.17 | ÷ | 5.57 | 5.57 | = | 6,498 | ÷ | 1,165,765,344 | |
| Feb 23, 2009 | 1.65 | = | 8.83 | ÷ | 5.35 | 5.35 | = | 6,237 | ÷ | 1,165,835,472 | |
| Feb 27, 2008 | 2.56 | = | 16.22 | ÷ | 6.33 | 6.33 | = | 7,466 | ÷ | 1,180,023,048 | |
| Feb 27, 2007 | 2.55 | = | 15.16 | ÷ | 5.96 | 5.96 | = | 7,043 | ÷ | 1,182,506,024 | |
| Feb 27, 2006 | 2.39 | = | 13.25 | ÷ | 5.55 | 5.55 | = | 6,553 | ÷ | 1,179,904,176 |
Based on: 10-K (reporting date: 2016-12-31), 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 Reynolds American Inc. Annual Report.
The analysis of the Price to Book Value (P/BV) ratio reveals a period of significant volatility and a structural shift in valuation metrics between 2006 and 2017. The overall trajectory is characterized by a sustained increase in market valuation relative to book value, culminating in a peak in 2015, followed by a normalization resulting from a substantial increase in book value per share in 2016.
- Share Price Trends
- The share price exhibited a long-term upward trajectory, rising from 13.25 in 2006 to 60.54 in 2017. A notable contraction occurred in 2009, with the price dropping to 8.83, before entering a period of accelerated growth starting in 2014, where prices rose from 24.04 to 60.54 over three years.
- Book Value Per Share (BVPS) Dynamics
- BVPS remained relatively stagnant or trended slightly downward for a decade, moving from 5.55 in 2006 to a low of 4.26 in 2015. A significant structural shift occurred in 2016, where BVPS jumped to 12.79 and further increased to 15.23 in 2017, indicating a substantial expansion of the company's equity base or an asset revaluation.
- P/BV Ratio Interpretation
- The P/BV ratio experienced three distinct phases. First, a period of stability and a subsequent dip occurred between 2006 and 2009, reaching a low of 1.65. Second, a period of aggressive expansion followed from 2010 to 2015, during which the ratio climbed to 8.26, suggesting the market was pricing the company at a high premium relative to its accounting book value. Third, a normalization phase began in 2016, where the ratio dropped to 3.79 and settled at 3.98 in 2017. This correction was driven by the sharp increase in BVPS rather than a decline in share price.
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Comparison to Competitors
Reynolds American Inc., P/BV, long-term trends, comparison to competitors
| Reynolds American Inc. | Coca-Cola Co. | Mondelēz International Inc. | PepsiCo Inc. | Philip Morris International Inc. | |
|---|---|---|---|---|---|
| Feb 9, 2017 | 3.98 | 7.78 | 2.75 | 13.73 | — |
| Feb 11, 2016 | 3.79 | 7.48 | 2.23 | 11.75 | — |
| Feb 10, 2015 | 8.26 | 6.06 | 2.20 | 8.52 | — |
| Feb 11, 2014 | 5.00 | 5.06 | 1.78 | 4.90 | — |
| Feb 12, 2013 | 4.62 | 5.23 | 1.46 | 5.22 | — |
| Feb 15, 2012 | 3.72 | 4.95 | 1.90 | 4.83 | 624.24 |
| Feb 23, 2011 | 3.06 | 4.73 | 1.55 | 4.75 | 31.91 |
| Feb 19, 2010 | 2.36 | 4.90 | 1.65 | 5.83 | 16.12 |
| Feb 23, 2009 | 1.65 | 4.64 | 1.51 | 6.71 | 9.14 |
| Feb 27, 2008 | 2.56 | 6.36 | 1.77 | 6.67 | — |
| Feb 27, 2007 | 2.55 | 6.51 | 1.86 | 6.89 | — |
| Feb 27, 2006 | 2.39 | 6.08 | 1.72 | 6.92 | — |
Based on: 10-K (reporting date: 2016-12-31), 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).
Comparison to Sector (Food, Beverage & Tobacco)
Reynolds American Inc., P/BV, long-term trends, comparison to sector (food, beverage & tobacco)
| Reynolds American Inc. | Food, Beverage & Tobacco | |
|---|---|---|
| Feb 9, 2017 | 3.98 | 12.01 |
| Feb 11, 2016 | 3.79 | 10.24 |
| Feb 10, 2015 | 8.26 | 8.30 |
| Feb 11, 2014 | 5.00 | 5.72 |
| Feb 12, 2013 | 4.62 | 5.83 |
| Feb 15, 2012 | 3.72 | 5.32 |
| Feb 23, 2011 | 3.06 | 4.53 |
| Feb 19, 2010 | 2.36 | 4.84 |
| Feb 23, 2009 | 1.65 | 4.47 |
| Feb 27, 2008 | 2.56 | 4.55 |
| Feb 27, 2007 | 2.55 | 4.42 |
| Feb 27, 2006 | 2.39 | 4.14 |
Based on: 10-K (reporting date: 2016-12-31), 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).
Comparison to Industry (Consumer Staples)
Reynolds American Inc., P/BV, long-term trends, comparison to industry (consumer staples)
| Reynolds American Inc. | Consumer Staples | |
|---|---|---|
| Feb 9, 2017 | 3.98 | 5.35 |
| Feb 11, 2016 | 3.79 | 5.06 |
| Feb 10, 2015 | 8.26 | 4.55 |
| Feb 11, 2014 | 5.00 | 4.08 |
| Feb 12, 2013 | 4.62 | 3.89 |
| Feb 15, 2012 | 3.72 | 3.50 |
| Feb 23, 2011 | 3.06 | 3.45 |
| Feb 19, 2010 | 2.36 | 3.38 |
| Feb 23, 2009 | 1.65 | 3.48 |
| Feb 27, 2008 | 2.56 | 3.56 |
| Feb 27, 2007 | 2.55 | 3.66 |
| Feb 27, 2006 | 2.39 | 4.47 |
Based on: 10-K (reporting date: 2016-12-31), 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).