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).
Current Valuation Ratios
Baxter International Inc., current price multiples
| Baxter International Inc. | Abbott Laboratories | CVS Health Corp. | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | ||
|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||
| Current share price (P) | $48.08 | |||||||
| No. shares of common stock outstanding | 543,887,683 | |||||||
| Growth rate (g) | 13.33% | |||||||
| Earnings per share (EPS) | $1.78 | |||||||
| Next year expected EPS | $2.02 | |||||||
| Operating profit per share | $0.83 | |||||||
| Sales per share | $18.33 | |||||||
| Book value per share (BVPS) | $16.26 | |||||||
| Valuation Ratios (Price Multiples) | ||||||||
| Price to earnings (P/E) | 27.01 | 17.45 | 18.78 | 14.41 | 82.36 | 23.64 | 19.47 | |
| Price to next year expected earnings | 23.84 | 15.87 | 17.98 | 12.86 | 72.87 | 23.28 | 16.92 | |
| Price-earnings-growth (PEG) | 2.03 | 1.76 | 4.21 | 1.19 | 6.33 | 15.11 | 1.30 | |
| Price to operating profit (P/OP) | 58.24 | 34.26 | 10.17 | 11.84 | 81.44 | 18.51 | 8.68 | |
| Price to sales (P/S) | 2.62 | 5.57 | 0.23 | 0.49 | 22.90 | 3.29 | 0.71 | |
| Price to book value (P/BV) | 2.96 | 4.91 | 1.15 | 2.09 | 11.64 | 2.29 | 3.03 | |
Based on: 10-K (reporting date: 2015-12-31).
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)
Baxter International Inc., historical price multiples
Based on: 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).
- Price to Earnings (P/E) Ratio
- The P/E ratio exhibits a fluctuating trend over the five-year period. Starting at 14.26 in 2011, it increased steadily to 18.71 in 2013, then declined to 14.92 in 2014, before sharply rising to 22.32 in 2015. This pattern indicates growing investor expectations for earnings growth, particularly notable at the end of the period.
- Price to Operating Profit (P/OP) Ratio
- The P/OP ratio shows a general upward trend from 10.76 in 2011 to 14.11 in 2013, remaining relatively stable in 2014 at 13.76, and then surging dramatically to 48.11 in 2015. The sharp increase in 2015 suggests a potential disproportionate rise in market valuation relative to operating profit, which warrants further investigation into operating profit dynamics or market conditions that year.
- Price to Sales (P/S) Ratio
- The P/S ratio remained relatively stable with minor fluctuations. It increased from 2.28 in 2011 to a peak of 2.56 in 2012, then steadily declined to 2.17 by 2015. This stability coupled with a slight downward trend may reflect consistent sales performance with moderate market valuation adjustments over time.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio revealed a downward trend across the period. Initially, it rose from 4.82 in 2011 to a peak of 5.23 in 2012, then gradually decreased each subsequent year, reaching 2.44 in 2015. The decline indicates a decreasing premium applied by the market over the company's book value, possibly reflecting changes in asset composition, book value growth, or market sentiment toward the company's equity.
Price to Earnings (P/E)
Baxter International Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 547,871,849 | 542,581,466 | 543,187,695 | 545,928,648 | 560,346,203 | |
| Selected Financial Data (US$) | ||||||
| Net income attributable to Baxter (in millions) | 968) | 2,497) | 2,012) | 2,326) | 2,224) | |
| Earnings per share (EPS)2 | 1.77 | 4.60 | 3.70 | 4.26 | 3.97 | |
| Share price1, 3 | 39.43 | 68.67 | 69.29 | 66.42 | 56.59 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 22.32 | 14.92 | 18.71 | 15.59 | 14.26 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 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).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
EPS = Net income attributable to Baxter ÷ No. shares of common stock outstanding
= 968,000,000 ÷ 547,871,849 = 1.77
3 Closing price as at the filing date of Baxter International Inc. Annual Report.
4 2015 Calculation
P/E ratio = Share price ÷ EPS
= 39.43 ÷ 1.77 = 22.32
5 Click competitor name to see calculations.
- Share price
- The share price exhibited an overall upward trend from 2011 to 2014, rising from $56.59 to a peak of $69.29 in 2013, before slightly declining to $68.67 in 2014. However, in 2015 there was a significant drop to $39.43, indicating a sharp decrease in market valuation during that year.
- Earnings per share (EPS)
- The EPS showed moderate fluctuations over the period. It increased from $3.97 in 2011 to $4.26 in 2012, then declined to $3.70 in 2013. It recovered to a high of $4.60 in 2014, but saw a substantial decline in 2015, falling to $1.77. This decline indicates a notable decrease in profitability per share during the final year.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio fluctuated notably. It increased from 14.26 in 2011 to a high of 18.71 in 2013, suggesting growing investor willingness to pay for earnings. The ratio then dropped to 14.92 in 2014, followed by a sharp rise to 22.32 in 2015, despite the decrease in share price and EPS. This indicates that the market valued earnings less favorably in 2015, possibly reflecting concerns about future earnings potential or increased risk.
Price to Operating Profit (P/OP)
Baxter International Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 547,871,849 | 542,581,466 | 543,187,695 | 545,928,648 | 560,346,203 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 449) | 2,707) | 2,668) | 2,821) | 2,946) | |
| Operating profit per share2 | 0.82 | 4.99 | 4.91 | 5.17 | 5.26 | |
| Share price1, 3 | 39.43 | 68.67 | 69.29 | 66.42 | 56.59 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 48.11 | 13.76 | 14.11 | 12.85 | 10.76 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 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).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 449,000,000 ÷ 547,871,849 = 0.82
3 Closing price as at the filing date of Baxter International Inc. Annual Report.
4 2015 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 39.43 ÷ 0.82 = 48.11
5 Click competitor name to see calculations.
An analysis of the financial data over the period from 2011 to 2015 reveals several notable trends and changes.
- Share Price
- The share price showed a positive trajectory from 2011 through 2014, increasing steadily from $56.59 to $68.67. However, in 2015, there was a significant decline to $39.43, representing a sharp reversal in the previous upward trend.
- Operating Profit Per Share
- Operating profit per share experienced a slight downward trend over the first four years, decreasing from $5.26 in 2011 to $4.99 in 2014. This decline was relatively modest. However, in 2015, the operating profit per share dropped precipitously to $0.82, indicating a substantial reduction in profitability on a per-share basis.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio exhibited an increasing trend from 2011 to 2013, rising from 10.76 to 14.11, and then slightly decreased in 2014 to 13.76. However, in 2015, the ratio surged dramatically to 48.11. This spike is consistent with the significant fall in operating profit per share while the share price had already declined considerably, reflecting a valuation imbalance or heightened market uncertainty related to operational earnings.
Overall, the data indicates that the company enjoyed stable or growing market valuation and relatively stable profitability per share until 2014. The year 2015 stands out due to a substantial decline in operating profit per share coupled with a significant drop in share price and a sharp increase in the P/OP ratio, suggesting operational and market challenges during that period.
Price to Sales (P/S)
Baxter International Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 547,871,849 | 542,581,466 | 543,187,695 | 545,928,648 | 560,346,203 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in millions) | 9,968) | 16,671) | 15,259) | 14,190) | 13,893) | |
| Sales per share2 | 18.19 | 30.73 | 28.09 | 25.99 | 24.79 | |
| Share price1, 3 | 39.43 | 68.67 | 69.29 | 66.42 | 56.59 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 2.17 | 2.23 | 2.47 | 2.56 | 2.28 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 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).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
Sales per share = Net sales ÷ No. shares of common stock outstanding
= 9,968,000,000 ÷ 547,871,849 = 18.19
3 Closing price as at the filing date of Baxter International Inc. Annual Report.
4 2015 Calculation
P/S ratio = Share price ÷ Sales per share
= 39.43 ÷ 18.19 = 2.17
5 Click competitor name to see calculations.
The financial data reveals several notable trends for the company over the five-year period from 2011 to 2015.
- Share Price
- The share price exhibited an increasing trend from 2011 through 2013, rising from $56.59 to a peak of $69.29 in 2013. In 2014, the price remained relatively stable at $68.67 but experienced a sharp decline in 2015 to $39.43. This marks a significant reduction in market value in the final year, indicating potential market concerns or adverse developments affecting investor sentiment.
- Sales per Share
- Sales per share showed a consistent upward trend from 2011 to 2014, increasing from $24.79 to $30.73. However, in 2015, sales per share dropped substantially to $18.19. This decrease aligns with the decline in share price observed in 2015, suggesting weakening operational performance or lower revenue generation per share in that year.
- Price-to-Sales Ratio (P/S)
- The price-to-sales ratio increased modestly from 2.28 in 2011 to 2.56 in 2012, then gradually decreased over the following years, ending at 2.17 in 2015. The downward trend in P/S ratio despite the falling share price in 2015 suggests that the decline in share price was somewhat offset by the fall in sales per share. Overall, the P/S ratio indicates a moderate valuation contraction over the period, especially in the last year.
In summary, the data depicts a period of growth in sales per share and share price until 2014, followed by a pronounced downturn in 2015. The simultaneous decline in both share price and sales per share, along with a lowering price-to-sales ratio, may point to operational challenges or market conditions negatively impacting the company's financial performance and investor perception in the final year analyzed.
Price to Book Value (P/BV)
Baxter International Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 547,871,849 | 542,581,466 | 543,187,695 | 545,928,648 | 560,346,203 | |
| Selected Financial Data (US$) | ||||||
| Total Baxter shareholders’ equity (in millions) | 8,846) | 8,120) | 8,463) | 6,938) | 6,585) | |
| Book value per share (BVPS)2 | 16.15 | 14.97 | 15.58 | 12.71 | 11.75 | |
| Share price1, 3 | 39.43 | 68.67 | 69.29 | 66.42 | 56.59 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 2.44 | 4.59 | 4.45 | 5.23 | 4.82 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| CVS Health Corp. | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 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).
1 Data adjusted for splits and stock dividends.
2 2015 Calculation
BVPS = Total Baxter shareholders’ equity ÷ No. shares of common stock outstanding
= 8,846,000,000 ÷ 547,871,849 = 16.15
3 Closing price as at the filing date of Baxter International Inc. Annual Report.
4 2015 Calculation
P/BV ratio = Share price ÷ BVPS
= 39.43 ÷ 16.15 = 2.44
5 Click competitor name to see calculations.
- Share Price
- The share price showed a general increase from 2011 through 2014, rising from 56.59 US$ to a peak of 69.29 US$ in 2013, then slightly decreasing to 68.67 US$ in 2014. However, a significant decline occurred in 2015, with the price dropping sharply to 39.43 US$.
- Book Value Per Share (BVPS)
- The book value per share exhibited a steady upward trend throughout the five-year period. It increased consistently from 11.75 US$ in 2011 to 16.15 US$ in 2015, reflecting growth in the company's net asset value attributed per share.
- Price-to-Book Value Ratio (P/BV)
- The price-to-book value ratio initially increased from 4.82 in 2011 to 5.23 in 2012, suggesting that the market valuation was rising faster than the book value. It then declined gradually to 4.45 in 2013 and 4.59 in 2014. A marked drop occurred in 2015, where the ratio sharply reduced to 2.44, indicating that the market price fell disproportionately compared to the growth in book value per share.
- Overall Analysis
- Over the analyzed period, the company's book value per share showed consistent growth, which could indicate an improvement in the firm's underlying financial strength. The share price increase between 2011 and 2014 aligns somewhat with this growth, though the price fluctuated more sharply. The significant price drop in 2015, accompanied by the steep decline in P/BV ratio, suggests a negative change in market sentiment or external factors affecting valuation despite the ongoing increase in book value. This divergence may warrant further investigation into company-specific events or broader market conditions impacting investor confidence during that year.