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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Current Valuation Ratios
Steel Dynamics Inc., current price multiples
| Steel Dynamics Inc. | Freeport-McMoRan Inc. | Materials | |||
|---|---|---|---|---|---|
| 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: 2021-12-31).
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)
Steel Dynamics Inc., historical price multiples
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| 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: 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).
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibits significant fluctuations over the analyzed period. It decreased sharply from 13.8 in 2017 to 6.76 in 2018, followed by a moderate increase to 8.56 in 2019. In 2020, there was a pronounced increase to 16.86, representing a peak in the observed timeframe. However, this was succeeded by a steep decline to 4.2 in 2021, the lowest value within the dataset. This pattern suggests varying investor sentiment and possibly fluctuating earnings performance during these years.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio trend generally parallels the P/E ratio but at lower levels. It dropped from 10.51 in 2017 to 4.94 in 2018, followed by a slight rise to 5.82 in 2019. The ratio escalated markedly to 10.96 in 2020, reaching the highest point in the series, before declining sharply to 3.14 in 2021. This variability indicates changes in market valuation relative to operating profit, reflecting operating profitability trends and market conditions over time.
- Price to Sales (P/S) Ratio
- The P/S ratio shows a general downward trend from 2017 to 2019, moving from 1.18 to 0.55. This decrease points to a reduction in market valuation relative to sales during this period. The ratio rebounded to 0.97 in 2020, indicating a recovery in valuation, but dipped again to 0.73 in 2021. Overall, the P/S ratio fluctuates within a relatively narrow range but indicates some volatility in the market's assessment of sales performance.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio decreases consistently from 3.35 in 2017 to 1.41 in 2019, indicating a declining market valuation relative to book value during these years. In 2020, the ratio rose to 2.14 and remained stable at the same level in 2021. The stabilization post-2019 suggests a recovery or reassessment of the company's net asset value by the market, maintaining a moderate valuation relative to book value thereafter.
Price to Earnings (P/E)
Steel Dynamics Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income attributable to Steel Dynamics, Inc. (in thousands) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Freeport-McMoRan Inc. | ||||||
| P/E Ratio, Industry | ||||||
| Materials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
EPS = Net income attributable to Steel Dynamics, Inc. ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Steel Dynamics Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The financial data reveals several noteworthy trends concerning the company's share price, earnings per share (EPS), and price-to-earnings (P/E) ratio over the five-year period ending December 31, 2021.
- Share Price
- The share price experienced volatility throughout the period. It decreased from $47.51 at the end of 2017 to a low of $26.89 by the end of 2019. Subsequently, the share price recovered significantly, reaching $44.01 by the end of 2020 and further increasing to $70.58 by the end of 2021. This indicates a strong rebound and growth in market valuation after the dip in 2019.
- Earnings Per Share (EPS)
- EPS followed a somewhat similar trajectory with some fluctuations. It increased from $3.44 in 2017 to $5.62 in 2018, before declining to $3.14 in 2019 and further dropping to $2.61 in 2020. The year 2021 saw a dramatic increase in EPS to $16.80, which suggests a substantial improvement in profitability or earnings performance in that year.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio displayed notable variability across the years. The ratio decreased from 13.8 in 2017 to 6.76 in 2018, followed by an increase to 8.56 in 2019 and a further spike to 16.86 in 2020. In 2021, the P/E ratio dropped sharply to 4.2. The low P/E ratio in 2021, despite the high EPS, suggests the share price increase outpaced the rise in earnings, indicating that the market priced the company relatively conservatively in relation to its earnings that year.
Price to Operating Profit (P/OP)
Steel Dynamics Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Freeport-McMoRan Inc. | ||||||
| P/OP Ratio, Industry | ||||||
| Materials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Steel Dynamics Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a decreasing trend from 2017 to 2019, dropping from $47.51 to $26.89. This was followed by a recovery period; the share price rose significantly in 2020 to $44.01 and continued its upward trajectory in 2021, reaching $70.58, reflecting strong investor confidence or market valuation improvement in the final observed year.
- Operating Profit per Share
- The operating profit per share showed volatility over the period. It increased sharply from $4.52 in 2017 to $7.69 in 2018, then declined to $4.62 in 2019 and further to $4.01 in 2020. A notable surge occurred in 2021, with operating profit per share rising prominently to $22.48, indicating a significant enhancement in the company’s operational performance in the last year observed.
- Price-to-Operating Profit Ratio (P/OP)
- The P/OP ratio moved inversely relative to operating profit per share trends. In 2017, the ratio was relatively high at 10.51, dropped substantially in 2018 to 4.94, and then fluctuated moderately in 2019 and 2020, recording 5.82 and 10.96 respectively. In 2021, the ratio declined sharply to 3.14, suggesting the share price was low relative to operating profit, reflecting potentially undervaluation or substantial growth in operating profitability compared to share price growth.
Price to Sales (P/S)
Steel Dynamics Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Freeport-McMoRan Inc. | ||||||
| P/S Ratio, Industry | ||||||
| Materials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Steel Dynamics Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the annual financial data reveals notable trends in share price, sales per share, and the price-to-sales (P/S) ratio over the five-year period ending in 2021.
- Share Price
- The share price experienced a decline from $47.51 in 2017 to a low of $26.89 in 2019, reflecting a significant reduction of approximately 43%. However, this was followed by a recovery period, with the share price rising to $44.01 in 2020 and further increasing sharply to $70.58 in 2021, indicating strong positive momentum and investor confidence in the latter years.
- Sales per Share
- Sales per share showed a generally stable to increasing trend with some volatility. The figure rose from $40.41 in 2017 to a peak of $52.75 in 2018, then slightly declined to $49 in 2019 and further to $45.5 in 2020. A substantial increase occurred in 2021, with sales per share more than doubling to $96.23. This sharp rise in 2021 suggests a significant improvement in revenue generation efficiency or overall scale.
- Price-to-Sales (P/S) Ratio
- The P/S ratio declined from 1.18 in 2017 to a trough of 0.55 in 2019, reflecting either a relative undervaluation of the stock compared to sales or pressures on share price. The ratio partially recovered to 0.97 in 2020 but then decreased again to 0.73 in 2021 despite the increase in share price. This pattern indicates that sales growth outpaced the rise in share price in 2021, suggesting increasing sales volumes may not have been fully reflected in market valuation proportionately.
Overall, the data suggest a period of initial decline in market valuation accompanied by stable sales, followed by a robust recovery in share price and a marked increase in sales per share by 2021. The fluctuating P/S ratio highlights changes in market sentiment and valuation relative to sales performance, with the 2021 data showing strong sales growth not entirely matched by proportional share price increases.
Price to Book Value (P/BV)
Steel Dynamics Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Steel Dynamics, Inc. equity (in thousands) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Freeport-McMoRan Inc. | ||||||
| P/BV Ratio, Industry | ||||||
| Materials | ||||||
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).
1 Data adjusted for splits and stock dividends.
2 2021 Calculation
BVPS = Total Steel Dynamics, Inc. equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of Steel Dynamics Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a downward trend from 2017 to 2019, decreasing from $47.51 to $26.89. In 2020, there was a noticeable recovery, with the price rising to $44.01, followed by a substantial increase to $70.58 in 2021. This indicates a strong positive momentum in the later years after a period of decline.
- Book Value per Share (BVPS) Trend
- The book value per share showed consistent growth throughout the entire period. Starting at $14.20 in 2017, it increased steadily to $32.96 by the end of 2021. This trend suggests the company consistently enhanced its net asset value on a per-share basis, reflecting ongoing accumulation of equity or retained earnings.
- Price-to-Book Value (P/BV) Ratio Trend
- The P/BV ratio started at a relatively high level of 3.35 in 2017, signifying that the market price was more than three times the book value per share. This ratio decreased significantly to 1.41 by 2019, reflecting either a declining share price or growing book value that outpaced the market price. From 2019 onwards, the ratio stabilized around 2.14 in 2020 and 2021, demonstrating a moderate valuation relative to book value as the share price rebounded but book value also continued to grow.
- Overall Analysis
- The financial data reveals that while the market share price initially weakened, the underlying book value of the company steadily improved, indicating strengthening fundamentals. The P/BV ratio's decrease followed by stabilization suggests that the market’s valuation adjusted to better reflect the company’s actual net asset growth. The strong rise in share price during the last two years possibly reflects renewed investor confidence or improved market conditions aligning with the company’s enhanced book value.