Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Cintas Corp., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
Analysis of the cash flow trajectory from 2019 to 2024 reveals a consistent expansion in operational cash generation contrasted with periodic volatility in the cash flows available to equity holders.
- Net Cash Provided by Operating Activities
- A sustained upward trend is observed in operating cash flows, which grew from US$ 1,067,862 thousand in 2019 to US$ 2,079,781 thousand in 2024. The growth remained steady through 2023, followed by a significant acceleration in the final year, indicating a strong and consistent increase in the company's ability to generate cash from its core business operations.
- Free Cash Flow to Equity (FCFE)
- Unlike the steady growth of operating activities, FCFE exhibited significant fluctuations. A marked decrease occurred in 2020, with values falling to US$ 748,694 thousand. While a recovery was observed through 2022, peaking at US$ 1,548,659 thousand, another substantial contraction took place in 2023, where FCFE dropped to US$ 955,505 thousand. The period concluded with a strong rebound to US$ 1,656,862 thousand in 2024.
- Comparative Analysis of Cash Flow Dynamics
- The divergence between net operating cash flow and FCFE suggests varying levels of capital expenditures or net debt repayments. In 2019 and 2022, FCFE was closely aligned with or exceeded operating cash flows, whereas the significant gaps observed in 2020 and 2023 indicate periods of intensified capital investment or debt servicing that reduced the cash remaining for shareholders despite the overall growth in operational efficiency.
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Price to FCFE Ratio, Current
Cintas Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 403,543,932 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,656,862) |
| FCFE per share | 4.11 |
| Current share price (P) | 192.65 |
| Valuation Ratio | |
| P/FCFE | 46.92 |
| Benchmarks | |
| P/FCFE, Industry | |
| Industrials | 37.74 |
Based on: 10-K (reporting date: 2024-05-31).
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Cintas Corp., historical P/FCFE calculation, comparison to benchmarks
Based on: 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31), 10-K (reporting date: 2019-05-31).
1 Data adjusted for splits and stock dividends.
3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,656,862,000 ÷ 403,075,724 = 4.11
4 Closing price as at the filing date of Cintas Corp. Annual Report.
5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= 188.71 ÷ 4.11 = 45.91
The analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio over the six-year period ending May 31, 2024, reveals a general expansion in valuation multiples coinciding with a consistent upward trajectory in share price.
- Share Price Appreciation
- A sustained increase in market value is observed, with the share price rising from 65.42 US$ in 2019 to 188.71 US$ in 2024. The most pronounced acceleration occurred between 2023 and 2024, where the price experienced a significant surge.
- FCFE per Share Volatility
- Free Cash Flow to Equity per share demonstrates a non-linear trend. While the value reached a period high of 4.11 US$ in 2024, it was marked by intermittent contractions, specifically in 2020 (1.81 US$) and 2023 (2.35 US$). These fluctuations suggest periods of variable capital expenditure or changes in working capital management.
- P/FCFE Ratio Trends
- The P/FCFE ratio exhibits high volatility, shifting from a baseline of 24.30 in 2019 to a peak of 53.73 in 2023. The sharp increase in 2023 resulted from the divergence between a rising share price and a simultaneous decline in FCFE per share. Although the ratio moderated to 45.91 in 2024, the multiple remains substantially elevated compared to the 2019-2022 average, indicating that equity valuation has outpaced the growth of free cash flow available to shareholders.
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