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).
An analysis of the cash flow metrics reveals a divergence between operational cash generation and the cash available to equity holders over the four-year period ending December 31, 2021.
- Net Cash Provided by Operating Activities
- A consistent upward trend is observed in operational cash generation. Net cash provided by operating activities increased from 1,613 million in 2018 to 2,874 million in 2021, indicating a strengthening capacity to generate liquidity from core business operations.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE exhibited extreme volatility, characterized by a substantial outlier in 2018 at 9,752 million, followed by a sharp correction to 1,032 million in 2019. The magnitude of the 2018 figure, which significantly exceeded operating cash flow, suggests a major non-operational financing event, such as significant new debt issuance or asset sales.
- FCFE Trends and Operational Divergence
- Between 2019 and 2021, a notable divergence occurred between operational performance and equity cash flow. While net cash provided by operating activities reached its period peak of 2,874 million in 2021, FCFE declined to 766 million in the same year. This inverse relationship indicates that an increasing portion of operating cash was diverted toward capital expenditures or debt amortization, thereby reducing the cash available for distribution to shareholders.
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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$) | |
| Free cash flow to equity (FCFE) (in millions) | 766) |
| FCFE per share | 0.54 |
| Current share price (P) | 38.50 |
| Valuation Ratio | |
| P/FCFE | 71.17 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Coca-Cola Co. | 77.38 |
| Mondelēz International Inc. | 15.78 |
| PepsiCo Inc. | 16.28 |
| Philip Morris International Inc. | 25.39 |
| P/FCFE, Sector | |
| Food, Beverage & Tobacco | 38.89 |
| P/FCFE, Industry | |
| Consumer Staples | 41.48 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Keurig Dr Pepper Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,418,158,363 | 1,407,267,272 | 1,406,986,313 | 1,406,081,521 | |
| Selected Financial Data (US$) | |||||
| 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 | — | — | — | |
| Mondelēz International Inc. | 30.57 | — | — | — | |
| PepsiCo Inc. | 77.00 | — | — | — | |
| Philip Morris International Inc. | 20.46 | — | — | — | |
| P/FCFE, Sector | |||||
| Food, Beverage & Tobacco | 29.54 | — | — | — | |
| P/FCFE, Industry | |||||
| Consumer Staples | 24.83 | — | — | — | |
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.
A significant divergence is observed between the market valuation of the shares and the Free Cash Flow to Equity (FCFE) per share between 2018 and 2021. While the share price maintained a consistent upward trajectory, the FCFE per share experienced a sharp decline after 2018, resulting in a substantial expansion of the P/FCFE valuation multiple.
- Share Price Trend
- The share price demonstrated steady growth over the analyzed period, increasing from 25.15 US$ in 2018 to 36.65 US$ by December 31, 2021. This consistent rise indicates a positive trend in market capitalization and investor demand.
- FCFE per Share Performance
- A precipitous contraction in FCFE per share occurred between 2018 and 2019, where the value dropped from 6.94 US$ to 0.73 US$. This figure remained suppressed through the following years, showing a marginal increase to 0.81 US$ in 2020 before declining further to 0.54 US$ in 2021.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio transitioned from 3.63 in 2018 to 67.85 by 2021. The exceptionally low ratio in 2018 suggests a period of high cash generation relative to price. However, the subsequent surge to 38.50 in 2019 and the eventual peak in 2021 reveal that the market price grew at a rate far exceeding the growth of free cash flow available to shareholders, leading to a significantly higher valuation multiple.
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