Common Stock Valuation Ratios (Price Multiples)
Quarterly Data
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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- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
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Historical Valuation Ratios (Summary)
General Dynamics Corp., historical price multiples (quarterly data)
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
- Price to Earnings (P/E) Ratio Trend
- The Price to Earnings ratio exhibited an upward trajectory from early 2016 through the end of 2017, increasing from approximately 14.8 to a peak above 21. This suggests that market valuations relative to earnings were rising, indicating growing investor optimism or expectations of earnings growth during this period. However, from 2018 onwards, a general decline is observed, with values falling to below 12 by late 2020. This decline implies a reduction in market valuation multiples relative to earnings, potentially reflecting either earnings growth outpacing price increases or a decrease in investor confidence.
- Price to Operating Profit (P/OP) Ratio Analysis
- The Price to Operating Profit ratio followed a pattern similar to the P/E ratio, showing a steady increase from the low 10s in early 2016 to nearly 15 by the close of 2017. This rise indicates increasing market valuation relative to operating profitability. Subsequent to this peak, there was a notable decrease, with the ratio dipping below 10 by late 2020. This decline may suggest improving operating profits not fully matched by price appreciation or a shift in market sentiment.
- Price to Sales (P/S) Ratio Development
- The Price to Sales ratio increased gradually from 1.4 in early 2016 to just over 2 in late 2017 and early 2018, reflecting higher valuations per unit of sales. Following the peak, a downward trend is apparent, with the ratio decreasing to below 1.0 by the end of the examined period in 2020. This reduction indicates a falling market valuation compared to sales, which may result from slower revenue growth, pricing pressure, or broader market valuation adjustments.
- Price to Book Value (P/BV) Ratio Pattern
- The Price to Book Value ratio rose from approximately 4.1 in early 2016 to a high around 5.5 by early 2017, indicating an increased market premium over book equity. After this peak, the ratio generally trended downward with some fluctuations, eventually declining to around 2.6 by late 2020. This signifies a reduced market valuation relative to the company's net asset value over time, which could suggest diminished investor confidence or changes in asset quality or growth perceptions.
- General Observations
- All valuation multiples experienced growth phases until late 2017 or early 2018, followed by significant declines through to 2020. The peak in late 2017/early 2018 across various ratios may correlate with favorable market conditions or company-specific performance during that timeframe. The subsequent declines across P/E, P/OP, P/S, and P/BV ratios may reflect external economic factors, changing investor sentiment, or internal company developments affecting profitability, sales, and book equity valuations. The consistent pattern across multiple financial ratios underscores a broad shift in market assessment of the company rather than isolated metric movements.
Price to Earnings (P/E)
General Dynamics Corp., historical P/E calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||||
| Net earnings (in millions) | |||||||||||||||||||||||||
| Earnings per share (EPS)2 | |||||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||||
| P/E ratio4 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| P/E Ratio, Competitors5 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Data adjusted for splits and stock dividends.
2 Q3 2020 Calculation
EPS
= (Net earningsQ3 2020
+ Net earningsQ2 2020
+ Net earningsQ1 2020
+ Net earningsQ4 2019)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of General Dynamics Corp. Quarterly or Annual Report.
4 Q3 2020 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrates an overall upward trajectory from April 2016 through December 2017, rising from approximately $143.61 to around $209.53. After reaching this peak, the price exhibits some volatility with a downward trend becoming apparent in 2018 and 2019. Notably, the share price dips significantly in early 2020, falling to a low point near $132.43 in September 2020, indicating a considerable market correction during that period.
- Earnings Per Share (EPS) Pattern
- EPS shows a steady upward progression across the entire timeline, increasing from about $9.7 in early 2016 to a peak exceeding $12.0 in late 2019 and early 2020. Despite some minor fluctuations quarter to quarter, the overall trend indicates consistent earnings growth, with a modest decline toward the last reported quarter in September 2020.
- Price-to-Earnings (P/E) Ratio Movement
- The P/E ratio starts at a relatively moderate level around 14.8 in April 2016 and increases to above 21 by late 2017, suggesting heightened market valuation relative to earnings during this period. However, from 2018 onward, the ratio declines, indicating that the market price is either adjusting downward more rapidly than earnings or that earnings growth moderates market expectations. The P/E ratio drops to near 11.93 by September 2020, reflective of lower price points relative to EPS in the most recent periods.
- Insights and Observations
- Despite the substantial earnings growth over the observed period, share price volatility and declines, especially in 2018 and 2020, suggest external factors or market sentiment significantly influenced valuation. The divergence between rising EPS and declining share price in 2020 results in a reduced P/E ratio, potentially signaling a more attractive valuation from a fundamental perspective or a period of market uncertainty. The overall data indicates a company with solid earnings performance facing variable investor confidence over the analyzed quarters.
Price to Operating Profit (P/OP)
General Dynamics Corp., historical P/OP calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||||
| Operating earnings (in millions) | |||||||||||||||||||||||||
| Operating profit per share2 | |||||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||||
| P/OP ratio4 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| P/OP Ratio, Competitors5 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Data adjusted for splits and stock dividends.
2 Q3 2020 Calculation
Operating profit per share
= (Operating earningsQ3 2020
+ Operating earningsQ2 2020
+ Operating earningsQ1 2020
+ Operating earningsQ4 2019)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of General Dynamics Corp. Quarterly or Annual Report.
4 Q3 2020 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall upward trend from early 2016 through early 2019, increasing from 143.61 to a peak of approximately 214.53 in April 2018. However, after this peak, the price showed volatility and a general downward trend, particularly notable in 2019 and 2020. By September 2020, the share price had declined to 132.43, below the levels observed at the beginning of the analyzed period.
- Operating Profit Per Share (OPPS)
- Operating profit per share remained relatively stable over the examined quarters, with a gradual upward trend. It increased from around 13.75 in early 2016 to a high of 16.05 in December 2019. Slight declines followed in 2020, bringing the OPPS to 14.61 by the end of September 2020. Despite fluctuations, the profitability per share generally grew during the period until late 2019.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio increased steadily from just above 10 in 2016 to about 15.35 at its highest in April 2018, indicating that the market valued the company at a higher premium relative to its operating profit at that time. After this peak, the ratio declined sharply, falling to a low near 8.57 by March 2020, before slightly recovering to 9.06 in September 2020. This decline suggests a repricing of the company's shares relative to operating profit, possibly reflecting market concerns or corrections in valuation.
- Overall Observations
- The data reflects a period of growth in both share price and operating profit per share up until early 2018 and through 2019. Subsequently, share price volatility increased, and a downward trend emerged, while operating profit per share showed minor declines but remained relatively resilient. The P/OP ratio movements indicate that the market's valuation of the company’s profitability contracted significantly in 2019 and 2020. These patterns may suggest market uncertainty or changing expectations about the company’s future earnings performance during the latter part of the analysis period.
Price to Sales (P/S)
General Dynamics Corp., historical P/S calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||||
| Revenue (in millions) | |||||||||||||||||||||||||
| Sales per share2 | |||||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||||
| P/S ratio4 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| P/S Ratio, Competitors5 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Data adjusted for splits and stock dividends.
2 Q3 2020 Calculation
Sales per share
= (RevenueQ3 2020
+ RevenueQ2 2020
+ RevenueQ1 2020
+ RevenueQ4 2019)
÷ No. shares of common stock outstanding
= ( + + + )
÷ =
3 Closing price as at the filing date of General Dynamics Corp. Quarterly or Annual Report.
4 Q3 2020 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends regarding the share price, sales per share, and the price-to-sales (P/S) ratio over the observed period.
- Share Price
- The share price experienced a generally upward trend from the beginning of the period, increasing from approximately $143.61 to a peak around $214.53 in early April 2018. Following this peak, there was a period of volatility with a downward trend, dropping significantly to about $132.43 by late September 2020. The peak in late 2017 to early 2018 indicates a period of strong market confidence, while the subsequent decline suggests either market correction or other adverse factors impacting investor sentiment.
- Sales Per Share
- Sales per share showed a steady and consistent increase throughout the entire period. Starting from roughly $102.76, there was a gradual rise to $133.17 by late September 2020. This steady growth indicates improving operational performance or increased revenue generation on a per-share basis despite fluctuations observed in the share price.
- Price-to-Sales (P/S) Ratio
- The P/S ratio mirrored some of the behaviors of the share price but with a notable distinct pattern. Initially, the P/S ratio increased from around 1.4 to a peak of approximately 2.05 by early April 2018, suggesting that the market valuation was growing faster than sales per share during this time. Subsequently, the P/S ratio declined sharply to near 1.0 by the end of the period, indicating that the share price had decreased relative to sales per share. This decline may reflect market adjustments recognizing that the price premium was unsustainable or changes in investor expectations towards the company's growth prospects.
In summary, although sales per share demonstrated continuous improvement indicative of strong underlying financial performance, the share price and P/S ratio displayed significant volatility. The initial bullish phase culminated around early 2018, followed by a sustained decline in valuation multiples and share price through 2020. This suggests that while the company's operational results strengthened, external market factors or investor sentiment may have adversely influenced market valuation during the latter periods.
Price to Book Value (P/BV)
General Dynamics Corp., historical P/BV calculation (quarterly data)
| Sep 27, 2020 | Jun 28, 2020 | Mar 29, 2020 | Dec 31, 2019 | Sep 29, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jul 1, 2018 | Apr 1, 2018 | Dec 31, 2017 | Oct 1, 2017 | Jul 2, 2017 | Apr 2, 2017 | Dec 31, 2016 | Oct 2, 2016 | Jul 3, 2016 | Apr 3, 2016 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | |||||||||||||||||||||||||
| Selected Financial Data (US$) | |||||||||||||||||||||||||
| Shareholders’ equity (in millions) | |||||||||||||||||||||||||
| Book value per share (BVPS)2 | |||||||||||||||||||||||||
| Share price1, 3 | |||||||||||||||||||||||||
| Valuation Ratio | |||||||||||||||||||||||||
| P/BV ratio4 | |||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||
| P/BV Ratio, Competitors5 | |||||||||||||||||||||||||
| Boeing Co. | |||||||||||||||||||||||||
| Caterpillar Inc. | |||||||||||||||||||||||||
| Eaton Corp. plc | |||||||||||||||||||||||||
| GE Aerospace | |||||||||||||||||||||||||
| Honeywell International Inc. | |||||||||||||||||||||||||
| Lockheed Martin Corp. | |||||||||||||||||||||||||
| RTX Corp. | |||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2020-09-27), 10-Q (reporting date: 2020-06-28), 10-Q (reporting date: 2020-03-29), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-29), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-07-01), 10-Q (reporting date: 2018-04-01), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-10-01), 10-Q (reporting date: 2017-07-02), 10-Q (reporting date: 2017-04-02), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-10-02), 10-Q (reporting date: 2016-07-03), 10-Q (reporting date: 2016-04-03).
1 Data adjusted for splits and stock dividends.
2 Q3 2020 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of General Dynamics Corp. Quarterly or Annual Report.
4 Q3 2020 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated an overall upward trend from April 2016, starting at $143.61, and peaking in December 2017 at $209.53. Following this peak, the price showed increased volatility, declining notably towards late 2018 and fluctuating around the $170-$190 range through 2019. In early 2020, the share price experienced a sharp decrease, reaching a low of $132.43 by September 2020, reflecting possible market or company-specific challenges during that period.
- Book Value per Share (BVPS) Movement
- The book value per share showed a consistent upward trend throughout the observed periods, increasing steadily from $34.62 in April 2016 to $51.28 by September 2020. This growth suggests continuous accumulation of shareholders’ equity, indicating strengthening of the company’s net asset base over time despite share price volatility.
- Price-to-Book Value Ratio (P/BV) Dynamics
- The P/BV ratio reflected significant fluctuations paralleling share price movements. Initially, the ratio hovered around 4.0 in early 2016, rising to a high of 5.55 in April 2017, which coincided with the share price peak. After this period, the ratio gradually declined, aligning with share price decreases while book value grew steadily. By September 2020, the P/BV ratio reached a low of 2.58, indicating that the market price was closer to the company’s book value, possibly implying reduced market sentiment or perceived risk.
- Summary Insights
- The data indicates that while the intrinsic value of the company, as represented by book value per share, steadily increased, the market valuation fluctuated significantly. The heightened P/BV ratios during 2017 suggest periods of premium valuation, whereas the downward trend in 2019-2020 points toward a market reassessment or emerging concerns affecting investor confidence. The divergence between rising book value and volatile share price suggests that external market factors or company-specific issues may have influenced investor sentiment independently of fundamental asset growth.