Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Keurig Dr Pepper 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).
The financial data indicates the performance of operating cash flow and free cash flow to equity over a four-year period. The net cash provided by operating activities shows a generally positive trend, with an initial value of 1,613 million US dollars in 2018 increasing significantly to 2,474 million in 2019. This level was maintained in 2020 with a slight decrease to 2,456 million, followed by a further increase in 2021 to 2,874 million. This suggests an overall strengthening of cash generation from core operations throughout the period.
In contrast, the free cash flow to equity (FCFE) exhibits a highly irregular pattern. Starting at a notably high value of 9,752 million US dollars in 2018, FCFE sharply declines to 1,032 million in 2019. Subsequently, it experiences a modest increase to 1,139 million in 2020, followed by a decrease to 766 million in 2021. This considerable fluctuation indicates possible variability in capital expenditures, debt repayments, or other financing activities, which strongly influence the amount of cash available to equity holders.
The disparity between the steadily increasing operating cash flow and the volatile free cash flow to equity suggests that while operational performance improved, the company's capital structure or investment activities may have introduced significant variability in cash returns to shareholders. This could be the result of strategic investments, debt management, or other financial policies that affected free cash flow distribution.
Price to FCFE Ratio, Current
Keurig Dr Pepper Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 1,416,070,252 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 766) |
| FCFE per share | 0.54 |
| Current share price (P) | 38.50 |
| Valuation Ratio | |
| P/FCFE | 71.17 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Coca-Cola Co. | 38.99 |
| Mondelēz International Inc. | 34.70 |
| PepsiCo Inc. | 23.41 |
| Philip Morris International Inc. | 27.50 |
| P/FCFE, Sector | |
| Food, Beverage & Tobacco | 31.30 |
| P/FCFE, Industry | |
| Consumer Staples | 34.74 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Keurig Dr Pepper Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,418,158,363 | 1,407,267,272 | 1,406,986,313 | 1,406,081,521 | |
| Selected Financial Data (US$) | |||||
| Free cash flow to equity (FCFE) (in millions)2 | 766) | 1,139) | 1,032) | 9,752) | |
| FCFE per share3 | 0.54 | 0.81 | 0.73 | 6.94 | |
| Share price1, 4 | 36.65 | 30.86 | 28.24 | 25.15 | |
| Valuation Ratio | |||||
| P/FCFE5 | 67.85 | 38.13 | 38.50 | 3.63 | |
| Benchmarks | |||||
| P/FCFE, Competitors6 | |||||
| Coca-Cola Co. | 23.29 | 30.91 | — | — | |
| Mondelēz International Inc. | 30.57 | 20.76 | — | — | |
| PepsiCo Inc. | 77.00 | 10.51 | — | — | |
| Philip Morris International Inc. | 20.46 | 15.06 | — | — | |
| P/FCFE, Sector | |||||
| Food, Beverage & Tobacco | 29.54 | 16.45 | — | — | |
| P/FCFE, Industry | |||||
| Consumer Staples | 24.84 | 18.28 | — | — | |
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).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 766,000,000 ÷ 1,418,158,363 = 0.54
4 Closing price as at the filing date of Keurig Dr Pepper Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 36.65 ÷ 0.54 = 67.85
6 Click competitor name to see calculations.
- Share Price
- The share price exhibited a consistent upward trend over the four-year period, increasing from $25.15 at the end of 2018 to $36.65 by the end of 2021. This represents an overall growth of approximately 45.6%, indicating positive market sentiment or investor confidence.
- Free Cash Flow to Equity (FCFE) per Share
- The FCFE per share showed a marked decline following 2018. Starting at $6.94 in 2018, it sharply dropped to $0.73 in 2019, followed by a slight increase to $0.81 in 2020, and thereafter a reduction to $0.54 in 2021. This pattern suggests a significant contraction in free cash flow available to equity holders after 2018, with relatively low and fluctuating cash generation in subsequent years.
- Price to Free Cash Flow to Equity (P/FCFE) Ratio
- The P/FCFE ratio escalated dramatically from 3.63 in 2018 to 38.50 in 2019, remaining elevated at 38.13 in 2020 and increasing further to 67.85 in 2021. The substantial rise in this valuation ratio is primarily driven by the sharp decline in FCFE per share despite the rising share price, indicating the stock became increasingly expensive relative to its cash flow generation over this period.
- Overall Analysis
- The data reflects a divergence between market valuation and the company’s free cash flow performance. While the share price steadily increased, the FCFE per share diminished substantially, leading to a significant expansion in the P/FCFE ratio. This may imply investor expectations for future growth or other value drivers beyond current free cash flow, or possibly overvaluation concerns given the rising price multiples in the context of weakening cash flow metrics.