Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Automatic Data Processing Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
- Operating Cash Flows
-
The net cash flows provided by operating activities demonstrated a consistent upward trend over the analyzed six-year period. Starting at 1,859,900 thousand US dollars in mid-2016, the figure steadily increased year-over-year to reach 3,093,300 thousand US dollars by mid-2021. This pattern suggests improving operational efficiency and growing cash generation capacity from core business activities.
- Free Cash Flow to Equity (FCFE)
-
The free cash flow to equity exhibited more variability across the same timeframe. It was highest at 3,470,700 thousand US dollars in mid-2016 but then declined significantly in the following year to 1,653,300 thousand US dollars. Subsequently, it showed a recovery trajectory, rising gradually to 2,157,200 thousand US dollars by mid-2020. The FCFE then surged sharply in mid-2021 to 3,577,000 thousand US dollars, marking the highest value in the examined period.
This fluctuation in FCFE compared to the steady increase in operating cash flows may indicate variations in capital expenditures, debt issuance or repayments, or other financing activities affecting cash available to equity holders.
- Summary of Financial Trends
-
Overall, the data reflect a robust and improving cash flow generation from operations. The upward trend in operating cash flows supports a positive operational performance. The variability in FCFE highlights the impact of financing and investment decisions on equity shareholder returns. The strong rebound and peak in FCFE in 2021 suggest potentially strategic financial management or favorable market conditions in that year.
Price to FCFE Ratio, Current
Automatic Data Processing Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 417,747,152 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 3,577,000) |
| FCFE per share | 8.56 |
| Current share price (P) | 218.18 |
| Valuation Ratio | |
| P/FCFE | 25.48 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | 19.83 |
| Adobe Inc. | 16.20 |
| Cadence Design Systems Inc. | 29.74 |
| CrowdStrike Holdings Inc. | 117.97 |
| Fair Isaac Corp. | 47.89 |
| International Business Machines Corp. | 23.77 |
| Intuit Inc. | 48.09 |
| Microsoft Corp. | 49.56 |
| Oracle Corp. | 125.41 |
| Palantir Technologies Inc. | 287.68 |
| Palo Alto Networks Inc. | 64.97 |
| Salesforce Inc. | 23.81 |
| ServiceNow Inc. | 63.48 |
| Synopsys Inc. | 68.86 |
| Workday Inc. | 29.42 |
| P/FCFE, Sector | |
| Software & Services | 59.92 |
| P/FCFE, Industry | |
| Information Technology | 55.48 |
Based on: 10-K (reporting date: 2021-06-30).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Automatic Data Processing Inc., historical P/FCFE calculation, comparison to benchmarks
| Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | Jun 30, 2016 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 423,080,556 | 429,965,405 | 433,942,837 | 438,082,756 | 444,374,752 | 456,176,951 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 3,577,000) | 2,159,200) | 2,381,700) | 2,037,100) | 1,653,300) | 3,470,700) | |
| FCFE per share3 | 8.45 | 5.02 | 5.49 | 4.65 | 3.72 | 7.61 | |
| Share price1, 4 | 212.00 | 134.77 | 167.73 | 134.25 | 111.39 | 89.67 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 25.07 | 26.84 | 30.56 | 28.87 | 29.94 | 11.79 | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Accenture PLC | 25.76 | 19.01 | 19.50 | — | — | — | |
| Adobe Inc. | 34.26 | 41.36 | 41.90 | — | — | — | |
| Cadence Design Systems Inc. | 36.31 | 45.86 | — | — | — | — | |
| CrowdStrike Holdings Inc. | 41.38 | 880.68 | — | — | — | — | |
| Fair Isaac Corp. | 12.69 | 38.46 | 32.51 | — | — | — | |
| International Business Machines Corp. | 48.45 | 9.43 | — | — | — | — | |
| Intuit Inc. | 86.74 | 17.36 | 34.61 | — | — | — | |
| Microsoft Corp. | 42.54 | 42.74 | 30.77 | — | — | — | |
| Oracle Corp. | 8.36 | 6.27 | — | — | — | — | |
| Palantir Technologies Inc. | 198.12 | — | — | — | — | — | |
| Palo Alto Networks Inc. | 32.91 | 8.11 | 46.21 | — | — | — | |
| Salesforce Inc. | 49.52 | 50.40 | — | — | — | — | |
| ServiceNow Inc. | 64.54 | 49.83 | — | — | — | — | |
| Synopsys Inc. | 40.55 | 45.07 | 77.64 | — | — | — | |
| Workday Inc. | 40.57 | 74.21 | — | — | — | — | |
| P/FCFE, Sector | |||||||
| Software & Services | 33.71 | 26.75 | — | — | — | — | |
| P/FCFE, Industry | |||||||
| Information Technology | 27.24 | 23.37 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,577,000,000 ÷ 423,080,556 = 8.45
4 Closing price as at the filing date of Automatic Data Processing Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 212.00 ÷ 8.45 = 25.07
6 Click competitor name to see calculations.
- Share Price
- The share price exhibited a generally upward trend, increasing from $89.67 in June 2016 to $212 in June 2021. This represents a significant rise, with a notable acceleration occurring after June 2019. However, there was a decline observed between June 2019 and June 2020, where the share price dropped from $167.73 to $134.77 before recovering strongly by June 2021.
- FCFE per Share
- Free Cash Flow to Equity (FCFE) per share displayed some volatility over the period. It started at $7.61 in June 2016, sharply dropped to $3.72 in June 2017, then began a gradual recovery, reaching $5.49 in June 2019. The FCFE per share experienced a slight decrease in June 2020 to $5.02 but surged to $8.45 by June 2021, exceeding its initial value in 2016.
- P/FCFE Ratio
- The Price to FCFE ratio rose steeply in 2017, climbing from 11.79 to nearly 30, and remained relatively high but slightly decreased over the subsequent years. It peaked at 30.56 in June 2019 before gradually declining to 25.07 in June 2021. The ratio suggests that the company's shares traded at a higher multiple of FCFE after 2016, with a slight normalization in recent years.