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
Ecolab Inc., current price multiples
| Ecolab Inc. | Linde plc | Sherwin-Williams Co. | Chemicals | Materials | ||||
|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||
| Current share price (P) | $180.30 | |||||||
| No. shares of common stock outstanding | 286,751,531 | |||||||
| Growth rate (g) | 11.49% | |||||||
| Earnings per share (EPS) | $3.94 | |||||||
| Next year expected EPS | $4.39 | |||||||
| Operating profit per share | $5.57 | |||||||
| Sales per share | $44.40 | |||||||
| Book value per share (BVPS) | $25.19 | |||||||
| Valuation Ratios (Price Multiples) | ||||||||
| Price to earnings (P/E) | 45.76 | 33.68 | 32.09 | 53.98 | 36.96 | |||
| Price to next year expected earnings | 41.04 | 32.09 | 21.69 | 51.40 | 34.49 | |||
| Price-earnings-growth (PEG) | 3.98 | 6.80 | 0.67 | 10.75 | 5.16 | |||
| Price to operating profit (P/OP) | 32.34 | 25.61 | 22.57 | 40.72 | 23.22 | |||
| Price to sales (P/S) | 4.06 | 6.70 | 3.73 | 6.05 | 5.02 | |||
| Price to book value (P/BV) | 7.16 | 5.80 | 21.24 | 6.61 | 6.11 | |||
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)
Ecolab Inc., historical price multiples
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 increased from 25.06 in 2017 to 34.27 in 2018, then slightly decreased to 33.36 in 2019. There is missing data for 2020, but the ratio rose to 45.76 in 2021, indicating a significant increase in valuation relative to earnings in that year.
- Price to Operating Profit (P/OP) Ratio
- This ratio showed a consistent upward trend from 18.71 in 2017 to 25.82 in 2019, followed by a sharp increase to 42.88 in 2020. In 2021, it declined to 32.34, suggesting a partial correction but remaining elevated compared to earlier years.
- Price to Sales (P/S) Ratio
- The P/S ratio rose steadily from 2.73 in 2017 to 3.49 in 2019, then increased more sharply to 5.08 in 2020. It decreased to 4.06 in 2021, indicating an elevated valuation relative to sales but some moderation after 2020’s peak.
- Price to Book Value (P/BV) Ratio
- The P/BV ratio increased from 4.96 in 2017 to 6.12 in 2018, remaining relatively stable at 5.99 in 2019. It then surged to 9.7 in 2020, followed by a decline to 7.16 in 2021. This pattern reflects a substantial increase in market valuation relative to book value in 2020, with a subsequent partial reduction.
Overall, the data reflects a trend of increasing market valuation multiples across all four ratios from 2017 through 2020, peaking notably in 2020. The year 2021 shows a general partial retrenchment in price multiples, except for the price to earnings ratio which reached its highest point, indicating investors placed higher value on earnings despite adjustments in other valuation metrics.
Price to Earnings (P/E)
Ecolab 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 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Net income (loss) attributable to Ecolab (in thousands) | 1,129,900) | (1,205,100) | 1,558,900) | 1,429,100) | 1,508,400) | |
| Earnings per share (EPS)2 | 3.94 | -4.22 | 5.41 | 4.96 | 5.22 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 45.76 | — | 33.36 | 34.27 | 25.06 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Linde plc | 38.92 | 52.57 | — | — | — | |
| Sherwin-Williams Co. | 37.32 | 31.64 | — | — | — | |
| P/E Ratio, Sector | ||||||
| Chemicals | 38.39 | 43.19 | — | — | — | |
| P/E Ratio, Industry | ||||||
| Materials | 28.21 | 47.50 | — | — | — | |
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 (loss) attributable to Ecolab ÷ No. shares of common stock outstanding
= 1,129,900,000 ÷ 286,751,531 = 3.94
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/E ratio = Share price ÷ EPS
= 180.30 ÷ 3.94 = 45.76
5 Click competitor name to see calculations.
- Share price
- The share price exhibited an overall upward trend from 2017 to 2020, increasing from $130.84 to $209.36. However, in 2021, the share price declined to $180.30, indicating some volatility during the most recent period.
- Earnings per share (EPS)
- EPS showed relative stability between 2017 and 2019, fluctuating modestly between $4.96 and $5.41. There was a significant negative deviation in 2020 with an EPS of -$4.22, indicating a loss for that year. In 2021, EPS rebounded to $3.94, yet still remained below the pre-2020 levels.
- Price to Earnings (P/E) ratio
- The P/E ratio rose sharply from 25.06 in 2017 to above 33 in the two following years. No P/E ratio is recorded for 2020, consistent with the negative EPS. In 2021, the P/E ratio increased further to 45.76, reflecting a high valuation relative to earnings despite the reduced EPS.
Price to Operating Profit (P/OP)
Ecolab Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in thousands) | 1,598,600) | 1,395,700) | 2,013,800) | 1,947,000) | 2,019,800) | |
| Operating profit per share2 | 5.57 | 4.88 | 6.99 | 6.76 | 6.99 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 32.34 | 42.88 | 25.82 | 25.16 | 18.71 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Linde plc | 29.87 | 39.58 | — | — | — | |
| Sherwin-Williams Co. | 27.19 | 22.45 | — | — | — | |
| P/OP Ratio, Sector | ||||||
| Chemicals | 28.96 | 31.65 | — | — | — | |
| P/OP Ratio, Industry | ||||||
| Materials | 17.73 | 28.27 | — | — | — | |
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
= 1,598,600,000 ÷ 286,751,531 = 5.57
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 180.30 ÷ 5.57 = 32.34
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a general upward trend from 2017 to 2020, increasing from $130.84 to a peak of $209.36. However, in 2021, the share price declined to $180.30, indicating some level of market correction or changing investor sentiment after the 2020 highs.
- Operating Profit Per Share
- Operating profit per share remained relatively stable from 2017 through 2019, fluctuating slightly between $6.76 and $6.99. In 2020, there was a noticeable decrease to $4.88, likely reflecting operational challenges or external pressures during that period. The figure partially recovered in 2021 to $5.57, though it did not return to pre-2020 levels.
- Price-to-Operating Profit Ratio (P/OP)
- The P/OP ratio demonstrated a general upward trend over the years. Starting at 18.71 in 2017, it increased significantly, reaching a peak of 42.88 in 2020, which suggests that share prices rose disproportionately compared to operating profit per share during that year. In 2021, the ratio decreased to 32.34, reflecting the combined effect of a lowered share price and a modest recovery in operating profit.
Price to Sales (P/S)
Ecolab Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Net sales (in thousands) | 12,733,100) | 11,790,200) | 14,906,300) | 14,668,200) | 13,838,300) | |
| Sales per share2 | 44.40 | 41.25 | 51.73 | 50.96 | 47.91 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 4.06 | 5.08 | 3.49 | 3.34 | 2.73 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Linde plc | 4.84 | 4.83 | — | — | — | |
| Sherwin-Williams Co. | 3.49 | 3.50 | — | — | — | |
| P/S Ratio, Sector | ||||||
| Chemicals | 4.31 | 4.29 | — | — | — | |
| P/S Ratio, Industry | ||||||
| Materials | 3.83 | 4.08 | — | — | — | |
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
= 12,733,100,000 ÷ 286,751,531 = 44.40
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/S ratio = Share price ÷ Sales per share
= 180.30 ÷ 44.40 = 4.06
5 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the five-year period under review.
- Share Price
- The share price exhibited a general upward trend from 2017 to 2020, increasing from $130.84 to a peak of $209.36. However, in 2021, there was a noticeable decline to $180.30, suggesting some volatility or market adjustments after the prior years of growth.
- Sales Per Share
- Sales per share showed a modest upward trend from 2017 ($47.91) through 2019 ($51.73), followed by a significant drop in 2020 to $41.25. This decline indicates a reduction in sales performance or revenue per share during that year, with only a slight recovery noted in 2021 to $44.40, remaining below the earlier peak levels.
- Price-to-Sales (P/S) Ratio
- The P/S ratio increased consistently from 2.73 in 2017 to a high of 5.08 in 2020, indicating that the market was willing to pay a higher price for each dollar of sales. In 2021, the ratio decreased to 4.06, reflecting a correction following the earlier rise, potentially due to the reduced sales per share and lower share price that year.
Overall, the data reflects a period of growth and rising market valuation until 2020, followed by a downturn in key metrics in 2021. The decline in sales per share and the decrease in share price and P/S ratio in 2021 suggest challenges faced during that year impacting both operational performance and investor confidence.
Price to Book Value (P/BV)
Ecolab Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 286,751,531 | 285,849,956 | 288,166,440 | 287,853,232 | 288,858,441 | |
| Selected Financial Data (US$) | ||||||
| Total Ecolab shareholders’ equity (in thousands) | 7,224,200) | 6,166,500) | 8,685,300) | 8,003,200) | 7,618,500) | |
| Book value per share (BVPS)2 | 25.19 | 21.57 | 30.14 | 27.80 | 26.37 | |
| Share price1, 3 | 180.30 | 209.36 | 180.45 | 170.16 | 130.84 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 7.16 | 9.70 | 5.99 | 6.12 | 4.96 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Linde plc | 3.38 | 2.78 | — | — | — | |
| Sherwin-Williams Co. | 28.55 | 17.79 | — | — | — | |
| P/BV Ratio, Sector | ||||||
| Chemicals | 4.70 | 3.84 | — | — | — | |
| P/BV Ratio, Industry | ||||||
| Materials | 4.66 | 3.99 | — | — | — | |
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 Ecolab shareholders’ equity ÷ No. shares of common stock outstanding
= 7,224,200,000 ÷ 286,751,531 = 25.19
3 Closing price as at the filing date of Ecolab Inc. Annual Report.
4 2021 Calculation
P/BV ratio = Share price ÷ BVPS
= 180.30 ÷ 25.19 = 7.16
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a general upward trend from 2017 through 2020, rising from $130.84 to a peak of $209.36. However, in 2021, the share price declined to $180.30, indicating a decrease following the previous years' growth.
- Book Value per Share (BVPS)
- BVPS increased steadily from $26.37 in 2017 to $30.14 in 2019, suggesting a growth in the book value during this period. However, a significant drop occurred in 2020, with BVPS decreasing to $21.57, before partially recovering to $25.19 in 2021. This pattern indicates volatility in the company’s net asset value per share.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio rose steadily from 4.96 in 2017 to a high of 9.7 in 2020, indicating that the market valuation of the company increased relative to its book value, possibly reflecting higher investor confidence or expectations. In 2021, the ratio decreased to 7.16, aligning with the share price decline and partial recovery in BVPS. The trend suggests fluctuating investor valuation multiples over the five-year span.