Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Diamondback Energy Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The analysis of cash flow metrics from 2017 to 2021 reveals a general upward trajectory in operational cash generation alongside significant volatility in free cash flow to equity (FCFE).
- Operating Cash Flow Trends
- Net cash provided by operating activities exhibited a strong growth trend over the period, increasing from US$ 889 million in 2017 to a peak of US$ 3,944 million in 2021. Although a contraction occurred in 2020, where figures dropped to US$ 2,118 million, the overall five-year trajectory indicates a substantial expansion in the ability to generate cash from core operations.
- FCFE Volatility and Fluctuations
- Free cash flow to equity demonstrated considerably higher volatility than operating cash flow. FCFE rose sharply from US$ 398 million in 2017 to US$ 1,813 million in 2018, followed by a steep decline to US$ 620 million in 2019. After remaining relatively flat in 2020 at US$ 667 million, a strong recovery was recorded in 2021, with FCFE reaching US$ 1,599 million.
- Operational Divergence and Capital Allocation
- A significant divergence between operating cash flow and FCFE is observed in 2018 and 2019. In 2018, FCFE exceeded net cash provided by operating activities, suggesting the influence of net borrowing or asset divestitures. In contrast, 2019 showed a sharp disconnect where operating cash flow increased to US$ 2,734 million while FCFE fell to US$ 620 million, indicating a period of heavy capital expenditure or significant debt repayment.
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Price to FCFE Ratio, Current
Diamondback Energy Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 175,998,577 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 1,599) |
| FCFE per share | 9.09 |
| Current share price (P) | 163.55 |
| Valuation Ratio | |
| P/FCFE | 18.00 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 18.73 |
| ConocoPhillips | 25.71 |
| ExxonMobil Holdings Corp. | 28.49 |
| P/FCFE, Sector | |
| Oil, Gas & Consumable Fuels | 35.17 |
| P/FCFE, Industry | |
| Energy | 36.36 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Diamondback Energy Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 177,414,969 | 158,015,647 | 158,284,486 | 164,381,522 | 98,167,289 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 1,599) | 667) | 620) | 1,813) | 398) | |
| FCFE per share3 | 9.01 | 4.22 | 3.92 | 11.03 | 4.05 | |
| Share price1, 4 | 127.89 | 69.06 | 59.48 | 105.29 | 125.15 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 14.19 | 16.36 | 15.19 | 9.55 | 30.88 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | 32.05 | — | — | — | — | |
| ConocoPhillips | 10.61 | — | — | — | — | |
| ExxonMobil Holdings Corp. | 19.82 | — | — | — | — | |
| P/FCFE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 19.75 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Energy | 20.81 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,599,000,000 ÷ 177,414,969 = 9.01
4 Closing price as at the filing date of Diamondback Energy Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 127.89 ÷ 9.01 = 14.19
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio for the period between 2017 and 2021 demonstrates a transition from an initial high valuation to a more stabilized range, reflecting significant shifts in both market pricing and cash flow generation.
- Valuation Compression and Stabilization
- A substantial contraction in the P/FCFE ratio occurred between 2017 and 2018, falling from 30.88 to 9.55. This compression was primarily driven by a significant increase in FCFE per share, which rose from 4.05 to 11.03. From 2019 through 2021, the ratio entered a period of relative stabilization, fluctuating within a narrow band between 14.19 and 16.36.
- Correlation Between Share Price and Cash Flow
- The share price experienced a marked decline by December 31, 2019, reaching a low of 59.48. This coincided with a reduction in FCFE per share to 3.92, which moderated the impact on the P/FCFE ratio, resulting in a value of 15.19. By December 31, 2021, both the share price (127.89) and FCFE per share (9.01) recovered significantly, leading to a final P/FCFE ratio of 14.19.
- Cash Flow Volatility
- FCFE per share exhibited high volatility throughout the analyzed period, peaking in 2018 and reaching a trough in 2019. The subsequent growth in FCFE per share in 2020 and 2021 suggests a recovery in the company's ability to generate cash available to shareholders, which supported the return of the share price to levels exceeding those recorded in 2017.
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