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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- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Current Ratio since 2005
- Aggregate Accruals
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Current Valuation Ratios
National Oilwell Varco Inc., current price multiples
| National Oilwell Varco Inc. | Schlumberger Ltd. | ||
|---|---|---|---|
| Selected Financial Data | |||
| Current share price (P) | |||
| No. shares of common stock outstanding | |||
| Earnings per share (EPS) | |||
| Operating profit per share | |||
| Sales per share | |||
| Book value per share (BVPS) | |||
| Valuation Ratios (Price Multiples) | |||
| Price to sales (P/S) | |||
| Price to book value (P/BV) | |||
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)
National Oilwell Varco Inc., historical price multiples
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| 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: 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 Price to Earnings ratio exhibits a declining trend from 18.35 in 2011 to 9.03 in 2014, indicating a possible decrease in market valuation relative to earnings over these years. The ratio dropped substantially in 2012 to 11.66, then experienced a moderate increase in 2013 before falling again in 2014. Data for 2015 is not available, limiting the ability to comment on the most recent year.
- Price to Operating Profit (P/OP) Ratio
- The Price to Operating Profit ratio also follows a downward trajectory, decreasing from 12.46 in 2011 to 6.26 in 2014. This consistent decline suggests that the market value of the company relative to its operating profit has reduced significantly. A notable steep decline is observed from 2013 to 2014. Data for 2015 is missing.
- Price to Sales (P/S) Ratio
- This ratio steadily decreases from 2.5 in 2011 to 0.75 in 2015. The continuous decline implies a falling market valuation relative to revenue, which could be due to either decreasing sales prices, lower sales volumes, or a market reassessment of sales value. The decline is gradual but consistent across all years, with no interruptions.
- Price to Book Value (P/BV) Ratio
- The Price to Book Value ratio also declines from 2.08 in 2011 to 0.67 in 2015. This trend indicates a diminishing market valuation relative to the company's book value, which could reflect reduced investor confidence in the company's net asset value or changes in accounting measures. The decline is steady every year, corresponding with the trends observed in other valuation ratios.
Price to Earnings (P/E)
National Oilwell Varco 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 | ||||||
| Selected Financial Data (US$) | ||||||
| Net income (loss) attributable to Company (in millions) | ||||||
| Earnings per share (EPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/E ratio4 | ||||||
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Schlumberger Ltd. | ||||||
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 (loss) attributable to Company ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of National Oilwell Varco Inc. Annual Report.
4 2015 Calculation
P/E ratio = Share price ÷ EPS
= ÷ =
5 Click competitor name to see calculations.
The analyzed financial data reveals several noteworthy patterns and shifts over the period from 2011 to 2015.
- Share Price
- The share price displayed a general downward trend, beginning at $86.23 at the end of 2011. It decreased to $68.10 in 2012 but then showed a slight recovery to $76.42 in 2013. However, subsequent years saw a marked decline, dropping sharply to $55.13 in 2014 and further to $29.30 by the end of 2015, indicating a significant loss of market value.
- Earnings Per Share (EPS)
- EPS demonstrated variability during the period. Starting at $4.70 in 2011, it increased steadily to $5.84 in 2012, followed by a slight decline to $5.43 in 2013. The figure rose again in 2014 to $6.10, representing the highest point in the timeframe. However, there was a substantial downturn in 2015 with a negative EPS of -$2.05, signaling a loss per share and reflecting a challenging financial year.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio decreased from 18.35 in 2011 to 11.66 in 2012, suggesting either a reduction in share price relative to earnings or an improvement in earnings relative to price. It increased somewhat to 14.07 in 2013 before declining to 9.03 in 2014. Data for 2015 is unavailable. The overall declining trend up to 2014 indicates the market assigned a lower valuation multiple to earnings over time, potentially due to concerns about future growth or profitability.
In summary, the company experienced a declining market valuation as reflected in falling share prices and a decreasing P/E ratio through most of the period. Earnings were positive until 2014, peaking at $6.10 per share, but this was followed by a sharp reversal in 2015 with a negative earning result. These patterns suggest increasing financial difficulties culminating in 2015, contributing to reduced investor confidence and share price depreciation.
Price to Operating Profit (P/OP)
National Oilwell Varco Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Operating profit (loss) (in millions) | ||||||
| Operating profit per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/OP ratio4 | ||||||
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Schlumberger Ltd. | ||||||
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 profit (loss) ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of National Oilwell Varco Inc. Annual Report.
4 2015 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= ÷ =
5 Click competitor name to see calculations.
The analysis of the financial data over the period from 2011 to 2015 reveals several notable trends in share price, operating profit per share, and the price-to-operating-profit ratio.
- Share Price
- The share price experienced a downward trend throughout the period. Starting at $86.23 in 2011, the price declined to $68.10 in 2012, followed by a slight recovery to $76.42 in 2013. However, this was followed by continuous decreases in the subsequent years to $55.13 in 2014 and further down to $29.30 in 2015. This represents a significant overall decline, particularly between 2014 and 2015.
- Operating Profit per Share
- The operating profit per share showed a generally stable performance in the first four years, increasing from $6.92 in 2011 to a peak of $8.81 in 2014. Despite some fluctuations, the values remained relatively strong until 2014. However, there was a sharp reversal in 2015, with the operating profit per share turning negative, reaching -$1.04, indicating an operational loss on a per-share basis during that year.
- Price-to-Operating-Profit Ratio (P/OP)
- The P/OP ratio exhibited a decreasing trend over the first four years, falling from 12.46 in 2011 to 6.26 in 2014. This decline suggests that the share price was becoming cheaper relative to its operating profit per share, potentially indicating improved valuation attractiveness or market skepticism about future profit sustainability. The ratio for 2015 is unavailable, likely due to the negative operating profit per share, which renders the metric undefined or meaningless for that year.
Overall, the data paints a picture of declining market confidence and deteriorating operational performance in 2015 after several years of relative stability or improvement. The sharp downturn in both share price and operating profit per share in 2015 signals heightened financial challenges faced during that year.
Price to Sales (P/S)
National Oilwell Varco Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Revenue (in millions) | ||||||
| Sales per share2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/S ratio4 | ||||||
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Schlumberger Ltd. | ||||||
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 = Revenue ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of National Oilwell Varco Inc. Annual Report.
4 2015 Calculation
P/S ratio = Share price ÷ Sales per share
= ÷ =
5 Click competitor name to see calculations.
- Share Price Trend
- The share price experienced a notable decline over the five-year period from 2011 to 2015. Beginning at $86.23 in 2011, the price decreased to $68.10 in 2012, followed by a slight recovery to $76.42 in 2013. Subsequently, the share price declined significantly to $55.13 in 2014 and further dropped to $29.30 by the end of 2015. This downward trend indicates a loss of market value, especially pronounced in the latter two years.
- Sales Per Share Trend
- Sales per share showed an overall increase from 2011 to 2013, starting at $34.55 and rising to $53.37. This growth plateaued in 2014 with a slight decrease to $52.30, followed by a more substantial decline to $39.27 in 2015. The pattern suggests initial sales growth, but a reduction in sales performance occurred in the final year.
- Price-to-Sales (P/S) Ratio Trend
- The P/S ratio declined consistently each year, beginning at 2.5 in 2011 and falling to 0.75 by 2015. This steady decrease reflects the combined effects of declining share prices and fluctuating sales per share, indicating reduced market valuation relative to sales.
- Overall Insights
- The data show a weakening financial market position from 2011 to 2015. Despite early growth in sales per share, this was not sustained, and market valuation, as measured by share price and P/S ratio, decreased substantially. The decreasing P/S ratio suggests that investors were willing to pay less for each dollar of sales over time, potentially indicating deteriorating market sentiment or concerns about growth prospects.
Price to Book Value (P/BV)
National Oilwell Varco Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Total Company stockholders’ equity (in millions) | ||||||
| Book value per share (BVPS)2 | ||||||
| Share price1, 3 | ||||||
| Valuation Ratio | ||||||
| P/BV ratio4 | ||||||
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Schlumberger Ltd. | ||||||
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 Company stockholders’ equity ÷ No. shares of common stock outstanding
= ÷ =
3 Closing price as at the filing date of National Oilwell Varco Inc. Annual Report.
4 2015 Calculation
P/BV ratio = Share price ÷ BVPS
= ÷ =
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a declining trend over the five-year period. Starting at $86.23 at the end of 2011, it decreased to $68.10 in 2012, before showing a modest recovery in 2013 to $76.42. However, the price sharply declined again in the subsequent years, falling to $55.13 in 2014 and reaching a low of $29.30 by the end of 2015. This overall decrease indicates a substantial reduction in market valuation.
- Book Value Per Share (BVPS)
- The book value per share showed a different pattern compared to the share price. It increased steadily from $41.53 in 2011 to a peak of $51.88 in 2013. Afterward, it slightly declined to $50.48 in 2014 and further to $43.59 in 2015. This suggests some erosion in the net asset value per share in the later years, though it remains higher than the initial value in 2011.
- Price-to-Book Value (P/BV) Ratio
- The P/BV ratio consistently trended downward throughout the period. Beginning at 2.08 in 2011, it decreased to 1.44 in 2012 and remained relatively stable at 1.47 in 2013. Subsequently, it fell intensely to 1.09 in 2014 and further dropped below 1 to 0.67 in 2015. This decline reflects a diminishing market premium over book value, indicating either decreased investor confidence or perceived deterioration in asset quality or future prospects.
- Overall Analysis
- The data reveals a significant decline in market valuation as evidenced by the sharp drop in share price and P/BV ratio over five years, despite relatively stable or moderately increasing book value per share until 2013. This divergence suggests that market participants may have reassessed growth expectations, risk factors, or sector conditions negatively during this period. The share price decoupling from book value signals potential concerns about profitability, future earnings prospects, or external economic and industry influences impacting investor sentiment.