Price to Operating Profit (P/OP)
since 2005
Calculation
Waste Management Inc., P/OP, long-term trends, calculation
| P/OP | = | Share price1, 2, 3 | ÷ | Operating profit per share1 | Operating profit per share1 | = | Income from operations1 (in millions) |
÷ | No. shares of common stock outstanding2 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 15, 2022 | 19.95 | = | 142.68 | ÷ | 7.15 | 7.15 | = | 2,965 | ÷ | 414,586,718 | |
| Feb 22, 2021 | 19.22 | = | 110.56 | ÷ | 5.75 | 5.75 | = | 2,434 | ÷ | 423,152,948 | |
| Feb 13, 2020 | 19.50 | = | 124.23 | ÷ | 6.37 | 6.37 | = | 2,706 | ÷ | 424,708,758 | |
| Feb 14, 2019 | 15.02 | = | 98.84 | ÷ | 6.58 | 6.58 | = | 2,789 | ÷ | 423,779,540 | |
| Feb 15, 2018 | 13.82 | = | 84.02 | ÷ | 6.08 | 6.08 | = | 2,636 | ÷ | 433,673,878 | |
| Feb 16, 2017 | 13.63 | = | 71.18 | ÷ | 5.22 | 5.22 | = | 2,296 | ÷ | 439,703,007 | |
| Feb 18, 2016 | 12.05 | = | 55.31 | ÷ | 4.59 | 4.59 | = | 2,045 | ÷ | 445,652,359 | |
| Feb 17, 2015 | 10.77 | = | 53.94 | ÷ | 5.01 | 5.01 | = | 2,299 | ÷ | 459,128,449 | |
| Feb 18, 2014 | 17.97 | = | 41.72 | ÷ | 2.32 | 2.32 | = | 1,079 | ÷ | 464,821,875 | |
| Feb 14, 2013 | 9.33 | = | 37.14 | ÷ | 3.98 | 3.98 | = | 1,851 | ÷ | 465,200,137 | |
| Feb 16, 2012 | 7.83 | = | 34.42 | ÷ | 4.40 | 4.40 | = | 2,028 | ÷ | 461,374,381 | |
| Feb 17, 2011 | 8.53 | = | 37.98 | ÷ | 4.45 | 4.45 | = | 2,116 | ÷ | 475,487,984 | |
| Feb 16, 2010 | 8.46 | = | 32.90 | ÷ | 3.89 | 3.89 | = | 1,887 | ÷ | 484,972,117 | |
| Feb 17, 2009 | 6.30 | = | 28.63 | ÷ | 4.55 | 4.55 | = | 2,234 | ÷ | 491,461,631 | |
| Feb 19, 2008 | 7.43 | = | 33.83 | ÷ | 4.55 | 4.55 | = | 2,254 | ÷ | 495,349,812 | |
| Feb 15, 2007 | 9.37 | = | 35.65 | ÷ | 3.81 | 3.81 | = | 2,029 | ÷ | 533,077,368 | |
| Feb 21, 2006 | 10.84 | = | 33.90 | ÷ | 3.13 | 3.13 | = | 1,710 | ÷ | 546,684,987 |
Based on: 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 Waste Management Inc. Annual Report.
The financial performance and market valuation of Waste Management Inc. from 2006 to 2022 exhibit a long-term trajectory of growth in both share price and operating profitability, accompanied by a significant expansion in the valuation multiple.
- Share Price Appreciation
- A consistent upward trend in share price is observed over the analyzed period. After a period of relative stability between 2006 and 2013, prices accelerated from $37.14 in 2013 to $142.68 by February 2022. A temporary decline occurred in 2009, reaching a period low of $28.63, before entering a sustained growth phase.
- Operating Profitability Trends
- Operating profit per share generally increased from $3.13 in 2006 to $7.15 in 2022. The growth was not linear, characterized by a notable contraction in 2014 where profit per share dropped to $2.32, the lowest point in the series. Following this dip, profitability recovered strongly, consistently exceeding $4.50 per share from 2015 onward.
- Price to Operating Profit (P/OP) Dynamics
- The P/OP ratio demonstrates three distinct phases. The first phase (2006–2009) was marked by a contraction in the multiple, falling from 10.84 to a low of 6.30. The second phase (2010–2017) showed moderate volatility, including a sharp, outlier spike to 17.97 in 2014 resulting from the aforementioned decline in operating profit. The final phase (2018–2022) reflects a structural shift toward higher valuation multiples, with the ratio climbing steadily to end at a peak of 19.95.
- Valuation Correlation
- The data indicates that in the latter part of the period, share price growth outpaced the growth of operating profits. This is evidenced by the P/OP ratio nearly doubling between 2012 (7.83) and 2022 (19.95), suggesting increased market confidence or a re-rating of the company's earnings potential over time.
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