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
Reynolds American Inc., current price multiples
| Reynolds American Inc. | Coca-Cola Co. | Mondelēz International Inc. | PepsiCo Inc. | Philip Morris International Inc. | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Current share price (P) | $64.47 | |||||
| No. shares of common stock outstanding | 1,426,711,959 | |||||
| Growth rate (g) | 8.12% | |||||
| Earnings per share (EPS) | $4.26 | |||||
| Next year expected EPS | $4.60 | |||||
| Operating profit per share | $7.41 | |||||
| Sales per share | $11.81 | |||||
| Book value per share (BVPS) | $15.22 | |||||
| Valuation Ratios (Price Multiples) | ||||||
| Price to earnings (P/E) | 15.15 | 28.48 | 19.03 | 18.76 | 39.93 | |
| Price to next year expected earnings | 14.01 | 26.25 | 17.80 | 16.77 | — | |
| Price-earnings-growth (PEG) | 1.86 | 3.36 | 2.74 | 1.58 | — | |
| Price to operating profit (P/OP) | 8.70 | 30.30 | 13.83 | 13.94 | 21.02 | |
| Price to sales (P/S) | 5.46 | 6.43 | 2.41 | 1.96 | 7.44 | |
| Price to book value (P/BV) | 4.24 | 12.18 | 3.26 | 9.96 | — | |
Based on: 10-K (reporting date: 2016-12-31).
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)
Reynolds American Inc., historical price multiples
Based on: 10-K (reporting date: 2016-12-31), 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).
- Price to Earnings (P/E) Ratio
- The Price to Earnings ratio displayed notable fluctuations over the analyzed period. Initially, there was a decline from 19.1 in 2012 to 15.03 in 2013, followed by a sharp increase reaching 25.41 in 2014. Subsequently, the ratio decreased again, settling at 14.21 by the end of 2016. This pattern suggests variability in market valuation relative to earnings, with peaks and troughs corresponding to changing investor sentiment or earnings performance.
- Price to Operating Profit (P/OP) Ratio
- The Price to Operating Profit ratio showed a decreasing trend with fluctuations. Starting at 10.97 in 2012, it dropped significantly to 8.24 in 2013, then rose to a peak of 14.76 in 2014. Afterward, it declined steadily over the next two years to reach 8.17 in 2016. The overall movement indicates variable market pricing relative to operating profitability, with a notable peak in 2014 followed by a general decline.
- Price to Sales (P/S) Ratio
- A consistent upward trend is observed in the Price to Sales ratio throughout the period. Starting from 1.99 in 2012, the ratio gradually increased year by year, reaching 5.12 in 2016. This persistent growth indicates escalating market valuation relative to sales, possibly reflecting investor optimism or improved market conditions associated with revenue performance.
- Price to Book Value (P/BV) Ratio
- The Price to Book Value ratio experienced substantial volatility. It rose moderately from 4.62 in 2012 to a high of 8.26 in 2014, before dropping sharply to 3.79 in 2015 and slightly increasing to 3.98 in 2016. This variation may suggest changing perceptions of the company's net asset value or fluctuations in equity market valuations within this timeframe.
Price to Earnings (P/E)
Reynolds American Inc., historical P/E calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,425,934,305 | 1,427,341,341 | 1,062,567,026 | 1,073,894,304 | 1,105,896,384 | |
| Selected Financial Data (US$) | ||||||
| Net income (in millions) | 6,073) | 3,253) | 1,470) | 1,718) | 1,272) | |
| Earnings per share (EPS)2 | 4.26 | 2.28 | 1.38 | 1.60 | 1.15 | |
| Share price1, 3 | 60.54 | 48.50 | 35.15 | 24.04 | 21.97 | |
| Valuation Ratio | ||||||
| P/E ratio4 | 14.21 | 21.28 | 25.41 | 15.03 | 19.10 | |
| Benchmarks | ||||||
| P/E Ratio, Competitors5 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
EPS = Net income ÷ No. shares of common stock outstanding
= 6,073,000,000 ÷ 1,425,934,305 = 4.26
3 Closing price as at the filing date of Reynolds American Inc. Annual Report.
4 2016 Calculation
P/E ratio = Share price ÷ EPS
= 60.54 ÷ 4.26 = 14.21
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trend over the five-year period. Starting at $21.97 at the end of 2012, it rose steadily each year, reaching $60.54 by the end of 2016. This represents a nearly threefold increase, indicating strong market confidence or favorable performance perceptions.
- Earnings Per Share (EPS)
- EPS demonstrated overall growth with some fluctuations. Beginning at $1.15 in 2012, EPS increased to $1.60 in 2013, then decreased slightly to $1.38 in 2014. After 2014, the EPS showed significant improvement, climbing to $2.28 in 2015 and nearly doubling to $4.26 in 2016. This suggests an overall enhancement in profitability, particularly notable in the last two years.
- Price-to-Earnings (P/E) Ratio
- The P/E ratio displayed volatility throughout the period. It started at 19.1 in 2012, decreased to 15.03 in 2013, and then increased markedly to 25.41 in 2014. Following this peak, the ratio declined again to 21.28 in 2015 and further to 14.21 in 2016. The fluctuations suggest varying investor sentiment about the company’s valuation relative to earnings, with the lowest ratio in 2016 potentially indicating undervaluation relative to the substantial EPS increase that year.
Price to Operating Profit (P/OP)
Reynolds American Inc., historical P/OP calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,425,934,305 | 1,427,341,341 | 1,062,567,026 | 1,073,894,304 | 1,105,896,384 | |
| Selected Financial Data (US$) | ||||||
| Operating income (in millions) | 10,569) | 6,953) | 2,531) | 3,132) | 2,214) | |
| Operating profit per share2 | 7.41 | 4.87 | 2.38 | 2.92 | 2.00 | |
| Share price1, 3 | 60.54 | 48.50 | 35.15 | 24.04 | 21.97 | |
| Valuation Ratio | ||||||
| P/OP ratio4 | 8.17 | 9.96 | 14.76 | 8.24 | 10.97 | |
| Benchmarks | ||||||
| P/OP Ratio, Competitors5 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
Operating profit per share = Operating income ÷ No. shares of common stock outstanding
= 10,569,000,000 ÷ 1,425,934,305 = 7.41
3 Closing price as at the filing date of Reynolds American Inc. Annual Report.
4 2016 Calculation
P/OP ratio = Share price ÷ Operating profit per share
= 60.54 ÷ 7.41 = 8.17
5 Click competitor name to see calculations.
- Share Price
- The share price demonstrated a consistent upward trend over the five-year period. Starting at $21.97 at the end of 2012, the price increased steadily each year, reaching $60.54 by the end of 2016. This represents a nearly threefold increase, indicating strong market confidence or growth expectations.
- Operating Profit Per Share
- Operating profit per share exhibited variability but an overall increasing trend. It started at $2.00 in 2012, rose to a peak of $2.92 in 2013, then slightly declined to $2.38 in 2014. From 2014 onwards, the figure grew substantially, reaching $4.87 in 2015 and further increasing to $7.41 by 2016. This suggests an improvement in operating profitability per share, particularly in the last two years of the period analyzed.
- Price to Operating Profit Ratio (P/OP)
- The P/OP ratio fluctuated over the period, reflecting changing market valuation relative to operating profit. It started at 10.97 in 2012, decreased to 8.24 in 2013, then rose sharply to 14.76 in 2014. Subsequently, it declined again to 9.96 in 2015 and further to 8.17 in 2016. The pattern suggests that the stock price increased at a faster pace than operating profit in 2014, leading to a higher valuation multiple, but normalized to lower multiples in the following years as profitability improved significantly.
Price to Sales (P/S)
Reynolds American Inc., historical P/S calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,425,934,305 | 1,427,341,341 | 1,062,567,026 | 1,073,894,304 | 1,105,896,384 | |
| Selected Financial Data (US$) | ||||||
| Net sales, includes excise taxes (in millions) | 16,846) | 14,884) | 12,096) | 11,966) | 12,227) | |
| Sales per share2 | 11.81 | 10.43 | 11.38 | 11.14 | 11.06 | |
| Share price1, 3 | 60.54 | 48.50 | 35.15 | 24.04 | 21.97 | |
| Valuation Ratio | ||||||
| P/S ratio4 | 5.12 | 4.65 | 3.09 | 2.16 | 1.99 | |
| Benchmarks | ||||||
| P/S Ratio, Competitors5 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
Sales per share = Net sales, includes excise taxes ÷ No. shares of common stock outstanding
= 16,846,000,000 ÷ 1,425,934,305 = 11.81
3 Closing price as at the filing date of Reynolds American Inc. Annual Report.
4 2016 Calculation
P/S ratio = Share price ÷ Sales per share
= 60.54 ÷ 11.81 = 5.12
5 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trend over the five-year period. Starting at $21.97 at the end of 2012, it increased steadily each year, reaching $60.54 by the end of 2016. This represents a substantial appreciation in market value, with the most significant annual increases observed between 2014 and 2016.
- Sales per Share
- Sales per share showed relative stability with minor fluctuations throughout the period. Beginning at $11.06 in 2012, sales per share hovered around this value, exhibiting a slight increase to $11.81 by 2016. A modest decline occurred during 2015, with sales per share falling to $10.43 before recovering in 2016.
- Price-to-Sales (P/S) Ratio
- The Price-to-Sales ratio demonstrated a marked increasing trend, suggesting that the market valuation of the company's sales rose substantially over time. Starting from a ratio of 1.99 in 2012, it climbed gradually to 5.12 in 2016. The most pronounced increase occurred between 2013 and 2016, indicating growing investor optimism or improved market sentiment towards the company relative to its sales figures.
Price to Book Value (P/BV)
Reynolds American Inc., historical P/BV calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,425,934,305 | 1,427,341,341 | 1,062,567,026 | 1,073,894,304 | 1,105,896,384 | |
| Selected Financial Data (US$) | ||||||
| Shareholders’ equity (in millions) | 21,711) | 18,252) | 4,522) | 5,167) | 5,257) | |
| Book value per share (BVPS)2 | 15.23 | 12.79 | 4.26 | 4.81 | 4.75 | |
| Share price1, 3 | 60.54 | 48.50 | 35.15 | 24.04 | 21.97 | |
| Valuation Ratio | ||||||
| P/BV ratio4 | 3.98 | 3.79 | 8.26 | 5.00 | 4.62 | |
| Benchmarks | ||||||
| P/BV Ratio, Competitors5 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 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).
1 Data adjusted for splits and stock dividends.
2 2016 Calculation
BVPS = Shareholders’ equity ÷ No. shares of common stock outstanding
= 21,711,000,000 ÷ 1,425,934,305 = 15.23
3 Closing price as at the filing date of Reynolds American Inc. Annual Report.
4 2016 Calculation
P/BV ratio = Share price ÷ BVPS
= 60.54 ÷ 15.23 = 3.98
5 Click competitor name to see calculations.
The analysis of the provided financial data over the five-year period reveals several notable trends related to the share price, book value per share (BVPS), and the price-to-book value (P/BV) ratio.
- Share Price Trend
- The share price exhibited a consistent upward trend throughout the period. It increased from $21.97 in 2012 to $60.54 by the end of 2016. This represents a nearly threefold increase over five years, with year-over-year growth accelerating notably, particularly between 2013 and 2015.
- Book Value per Share (BVPS) Trend
- The book value per share showed more variability than the share price. It remained relatively stable with a slight decline from $4.75 in 2012 to $4.26 in 2014. However, from 2014 onward, there was a significant increase, reaching $15.23 by the end of 2016. This rise suggests strengthening equity or asset base relative to the shares outstanding during the latter part of the period.
- Price-to-Book Value (P/BV) Ratio Trend
- The P/BV ratio fluctuated significantly over the period. It started at 4.62 in 2012, peaked sharply to 8.26 in 2014, and then dropped to around 3.79 in 2015 before slightly increasing to 3.98 in 2016. This pattern indicates varying levels of investor valuation in relation to the book value per share. The high P/BV ratio in 2014 aligns with the share price increase despite the relative stagnation or decline in BVPS, implying elevated investor optimism or expectations. The subsequent decline in the ratio corresponds with the substantial rise in BVPS and a more moderate share price increase, suggesting a rebalancing of market valuation in relation to fundamental equity values.
In summary, the data reflect strong investor confidence as evidenced by the rising share price, accompanied by a substantial improvement in the company's book value per share starting in 2015. The volatility in the P/BV ratio highlights shifts in market perception relative to the company's net asset value, with the later years showing a valuation more closely aligned with fundamental book value improvements.