Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Kraft Heinz Co., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The financial performance from 2015 through 2019 is characterized by significant volatility in both operating cash flows and free cash flow to equity (FCFE). While operating cash flows demonstrated a recovery trend following a sharp contraction in 2017, FCFE exhibited extreme fluctuations, including a transition from a substantial surplus to a deficit and a subsequent failure to return to previous peaks.
- Operating Cash Flow Trends
- Net cash provided by operating activities increased from US$ 2,467 million in 2015 to US$ 5,238 million in 2016. A severe decline occurred in 2017, with cash flows dropping to US$ 527 million. This was followed by a consistent upward trajectory, reaching US$ 2,574 million in 2018 and US$ 3,552 million by the end of 2019.
- Free Cash Flow to Equity (FCFE) Analysis
- FCFE experienced more aggressive swings than operating cash flows. After an initial value of US$ 4,339 million in 2015, FCFE peaked at US$ 11,523 million in 2016. This surge was followed by a precipitous drop to a negative US$ 2,044 million in 2017. Although FCFE returned to positive territory in 2018 (US$ 1,596 million) and 2019 (US$ 857 million), the values remained well below the levels seen in the 2015-2016 period.
- Cash Flow Divergence and Insights
- A significant divergence is observed in 2016, where FCFE substantially exceeded operating cash flow, suggesting substantial cash inflows from asset divestitures or a net increase in debt. In contrast, the 2017 period shows FCFE turning negative despite positive operating cash flow, indicating that capital expenditures and debt repayments exceeded the cash generated from operations. By 2019, a paradoxical trend emerged where operating cash flow improved, yet FCFE declined, suggesting a potential increase in capital investment or debt obligations during that fiscal year.
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Price to FCFE Ratio, Current
Kraft Heinz Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 1,222,578,592 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 857) |
| FCFE per share | 0.70 |
| Current share price (P) | 34.38 |
| Valuation Ratio | |
| P/FCFE | 49.05 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Coca-Cola Co. | 76.63 |
| Mondelēz International Inc. | 15.38 |
| PepsiCo Inc. | 15.66 |
| Philip Morris International Inc. | 26.21 |
Based on: 10-K (reporting date: 2019-12-28).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Kraft Heinz Co., historical P/FCFE calculation, comparison to benchmarks
| Dec 28, 2019 | Dec 29, 2018 | Dec 30, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,221,399,549 | 1,219,938,804 | 1,218,801,890 | 1,217,136,057 | 1,215,189,526 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 857) | 1,596) | (2,044) | 11,523) | 4,339) | |
| FCFE per share3 | 0.70 | 1.31 | -1.68 | 9.47 | 3.57 | |
| Share price1, 4 | 26.88 | 28.74 | 70.80 | 92.94 | 77.37 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 38.31 | 21.97 | — | 9.82 | 21.67 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Coca-Cola Co. | — | — | — | — | — | |
| Mondelēz International Inc. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-28), 10-K (reporting date: 2018-12-29), 10-K (reporting date: 2017-12-30), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
3 2019 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 857,000,000 ÷ 1,221,399,549 = 0.70
4 Closing price as at the filing date of Kraft Heinz Co. Annual Report.
5 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 26.88 ÷ 0.70 = 38.31
6 Click competitor name to see calculations.
The financial performance between 2015 and 2019 is characterized by a severe erosion of equity value and significant instability in cash flow generation. A precipitous decline in share price is observed, falling from a peak of 92.94 US$ in 2016 to 26.88 US$ by 2019, representing a substantial loss in market capitalization over the period.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE per share exhibited extreme volatility. After a peak of 9.47 US$ in 2016, the metric collapsed to a negative value of -1.68 US$ in 2017. Although a return to positive territory occurred in 2018 and 2019, the recovery was marginal, with FCFE per share ending the period at 0.70 US$, significantly below the 2015 baseline of 3.57 US$.
- P/FCFE Ratio Analysis
- The P/FCFE ratio demonstrates a non-linear trajectory. A sharp contraction occurred in 2016, where the ratio dropped to 9.82, driven by a surge in FCFE per share. The ratio was non-calculable in 2017 due to negative cash flows. By 2019, the ratio escalated to 38.31, its highest point in the analyzed period.
- Valuation Divergence
- The expansion of the P/FCFE ratio from 21.97 in 2018 to 38.31 in 2019 occurred despite a continuing decline in the share price. This indicates that the contraction in FCFE per share outpaced the decline in market price, suggesting a significant deterioration in the company's ability to generate cash for equity holders relative to its market valuation.
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