Price to Operating Profit (P/OP)
since 2005
Calculation
United Rentals Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Operating income (loss)1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Jan 25, 2023 | 8.42 | = | 392.48 | ÷ | 46.60 | 46.60 | = | 3,232 | ÷ | 69,359,591 | |
| Jan 26, 2022 | 9.79 | = | 307.76 | ÷ | 31.44 | 31.44 | = | 2,277 | ÷ | 72,421,902 | |
| Jan 27, 2021 | 9.48 | = | 236.27 | ÷ | 24.93 | 24.93 | = | 1,800 | ÷ | 72,199,276 | |
| Jan 29, 2020 | 5.26 | = | 152.26 | ÷ | 28.93 | 28.93 | = | 2,152 | ÷ | 74,375,477 | |
| Jan 23, 2019 | 4.73 | = | 116.02 | ÷ | 24.51 | 24.51 | = | 1,951 | ÷ | 79,591,082 | |
| Jan 24, 2018 | 10.39 | = | 185.52 | ÷ | 17.85 | 17.85 | = | 1,507 | ÷ | 84,427,665 | |
| Jan 25, 2017 | 6.81 | = | 114.26 | ÷ | 16.78 | 16.78 | = | 1,415 | ÷ | 84,310,531 | |
| Jan 27, 2016 | 3.35 | = | 55.84 | ÷ | 16.69 | 16.69 | = | 1,518 | ÷ | 90,970,229 | |
| Jan 21, 2015 | 6.08 | = | 87.56 | ÷ | 14.41 | 14.41 | = | 1,391 | ÷ | 96,520,626 | |
| Jan 22, 2014 | 7.06 | = | 81.59 | ÷ | 11.56 | 11.56 | = | 1,078 | ÷ | 93,217,882 | |
| Jan 23, 2013 | 7.78 | = | 49.43 | ÷ | 6.35 | 6.35 | = | 591 | ÷ | 93,013,431 | |
| Jan 25, 2012 | 5.52 | = | 34.77 | ÷ | 6.29 | 6.29 | = | 396 | ÷ | 62,909,022 | |
| Feb 1, 2011 | 8.47 | = | 27.53 | ÷ | 3.25 | 3.25 | = | 197 | ÷ | 60,629,338 | |
| Feb 3, 2010 | 4.39 | = | 8.31 | ÷ | 1.89 | 1.89 | = | 114 | ÷ | 60,167,975 | |
| Feb 26, 2009 | — | = | 4.19 | ÷ | -10.50 | -10.50 | = | -630 | ÷ | 60,002,403 | |
| Feb 29, 2008 | 2.63 | = | 20.10 | ÷ | 7.63 | 7.63 | = | 659 | ÷ | 86,324,297 | |
| Feb 27, 2007 | 3.73 | = | 28.71 | ÷ | 7.71 | 7.71 | = | 626 | ÷ | 81,244,003 | |
| Mar 31, 2006 | 5.35 | = | 34.50 | ÷ | 6.45 | 6.45 | = | 500 | ÷ | 77,520,680 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 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), 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 United Rentals Inc. Annual Report.
The financial trajectory between 2006 and 2023 is characterized by extreme volatility in the early period followed by a sustained expansion in both nominal share value and operating profitability.
- Operating Profitability Trends
- Operating profit per share experienced a severe contraction in February 2009, falling to a loss of $10.50. Following this trough, a consistent upward trend is observed, with profits recovering to $1.89 in 2010 and reaching a peak of $46.60 by January 2023. This represents a substantial long-term increase in operational efficiency and earnings power.
- Share Price Dynamics
- The share price mirrored the volatility of the operating profits, crashing from $20.10 in February 2008 to $4.19 in February 2009. Subsequent recovery was aggressive, with the price climbing steadily to reach $392.48 by January 2023. The growth in share price eventually outpaced the growth in operating profit per share, reflecting an increase in market valuation over time.
- Price to Operating Profit (P/OP) Analysis
- The P/OP ratio demonstrates significant cyclicality. In the period leading up to the 2009 crisis, the ratio compressed from 5.35 in 2006 to 2.63 in 2008. After the 2009 earnings void, the ratio fluctuated, reaching a local peak of 8.47 in 2011 before dropping to 3.35 in 2016. A valuation peak occurred in January 2018, where the P/OP ratio reached 10.39, indicating a period of high market premium relative to operating earnings.
- Recent Valuation Stability
- From 2019 to 2023, the P/OP ratio stabilized within a range of 4.73 to 9.79. Despite the share price and operating profit per share reaching historic highs during this interval, the ratio indicates that the market has maintained a relatively consistent valuation multiple relative to the company's operating performance.
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Comparison to Competitors
United Rentals Inc., P/OP, long-term trends, comparison to competitors
| United Rentals Inc. | Boeing Co. | Caterpillar Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|
| Jan 25, 2023 | 8.42 | — | 16.25 | 14.06 | 26.48 |
| Jan 26, 2022 | 9.79 | — | 15.87 | 11.56 | 28.68 |
| Jan 27, 2021 | 9.48 | — | 24.23 | 10.63 | — |
| Jan 29, 2020 | 5.26 | — | 9.08 | 14.49 | 15.07 |
| Jan 23, 2019 | 4.73 | 19.08 | 9.20 | 11.62 | 12.16 |
| Jan 24, 2018 | 10.39 | 19.69 | 21.70 | 16.47 | 11.53 |
| Jan 25, 2017 | 6.81 | 17.20 | 116.61 | 13.51 | 10.86 |
| Jan 27, 2016 | 3.35 | 10.36 | 11.66 | 12.17 | 9.71 |
| Jan 21, 2015 | 6.08 | 13.96 | 9.71 | 10.89 | 11.15 |
| Jan 22, 2014 | 7.06 | 14.75 | 10.94 | 11.62 | 10.88 |
| Jan 23, 2013 | 7.78 | 9.09 | 7.30 | 6.40 | 10.73 |
| Jan 25, 2012 | 5.52 | 9.69 | 10.41 | 7.21 | 9.40 |
| Feb 1, 2011 | 8.47 | 10.76 | 16.44 | 6.84 | 10.86 |
| Feb 3, 2010 | 4.39 | 20.91 | 63.07 | 6.47 | 9.67 |
| Feb 26, 2009 | — | 7.87 | 3.61 | 5.31 | 5.88 |
| Feb 29, 2008 | 2.63 | 11.17 | 9.03 | 9.48 | 9.95 |
| Feb 27, 2007 | 3.73 | 23.81 | 8.83 | 10.84 | 11.11 |
| Mar 31, 2006 | 5.35 | 20.69 | 12.95 | 10.66 | 11.11 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 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), 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).