Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Marriott International Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
The financial performance from 2015 to 2019 is characterized by a divergence between operating cash flow and free cash flow to equity (FCFE), with the latter exhibiting significant volatility and a frequent reliance on non-operating cash inflows.
- Operating Cash Flow Trends
- Net cash provided by operating activities demonstrated a general upward trajectory in the early part of the period, rising from 1,430 million US$ in 2015 to a peak of 2,436 million US$ in 2017. However, a subsequent decline is observed, with cash flow falling to 1,685 million US$ by 2019, representing a reduction of approximately 30.8% from its peak.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE displayed substantial fluctuations throughout the five-year period. A sharp increase occurred in 2016, reaching 3,824 million US$, before dropping significantly to 1,722 million US$ in 2017. The figures recovered in 2018 to 2,921 million US$ and remained relatively strong at 2,545 million US$ in 2019.
- Analysis of Cash Flow Divergence
- A notable pattern is observed where FCFE frequently exceeded net cash provided by operating activities. This occurred in 2016, 2018, and 2019. Because FCFE accounts for capital expenditures and net borrowing, the fact that FCFE was higher than operating cash flow in these years indicates that net borrowing or asset divestitures outweighed capital expenditures, thereby increasing the cash available to equity holders beyond what was generated by core operations.
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Price to FCFE Ratio, Current
Marriott International Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 324,255,928 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 2,545) |
| FCFE per share | 7.85 |
| Current share price (P) | 82.31 |
| Valuation Ratio | |
| P/FCFE | 10.49 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Airbnb Inc. | 21.08 |
| Booking Holdings Inc. | 15.32 |
| Chipotle Mexican Grill Inc. | 28.29 |
| DoorDash, Inc. | 21.20 |
| McDonald’s Corp. | 23.07 |
| Starbucks Corp. | 36.79 |
Based on: 10-K (reporting date: 2019-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Marriott International Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 324,214,545 | 339,668,839 | 357,437,289 | 383,561,428 | 253,481,935 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 2,545) | 2,921) | 1,722) | 3,824) | 1,329) | |
| FCFE per share3 | 7.85 | 8.60 | 4.82 | 9.97 | 5.24 | |
| Share price1, 4 | 119.64 | 124.45 | 141.29 | 87.99 | 64.94 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 15.24 | 14.47 | 29.33 | 8.83 | 12.39 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Airbnb Inc. | — | — | — | — | — | |
| Booking Holdings Inc. | — | — | — | — | — | |
| Chipotle Mexican Grill Inc. | — | — | — | — | — | |
| DoorDash, Inc. | — | — | — | — | — | |
| McDonald’s Corp. | — | — | — | — | — | |
| Starbucks Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 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
= 2,545,000,000 ÷ 324,214,545 = 7.85
4 Closing price as at the filing date of Marriott International Inc. Annual Report.
5 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 119.64 ÷ 7.85 = 15.24
6 Click competitor name to see calculations.
The analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio from 2015 to 2019 reveals a period of significant volatility, characterized by a dramatic valuation spike in 2017 followed by a stabilization period.
- Share Price Dynamics
- A strong upward trend in share price was observed between 2015 and 2017, with the value increasing from US$ 64.94 to a peak of US$ 141.29. Subsequently, the share price underwent a gradual correction, declining to US$ 124.45 in 2018 and ending the period at US$ 119.64 in 2019.
- FCFE per Share Performance
- Free Cash Flow to Equity per share exhibited substantial fluctuations. After an initial increase from US$ 5.24 in 2015 to US$ 9.97 in 2016, a sharp contraction occurred in 2017, where FCFE dropped to its lowest point in the period at US$ 4.82. A recovery was noted in 2018 with a rise to US$ 8.60, followed by a slight decrease to US$ 7.85 in 2019.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio experienced extreme variance, moving from 12.39 in 2015 to a low of 8.83 in 2016. The ratio peaked sharply at 29.33 in 2017, a result of the convergence of the period's highest share price and lowest FCFE per share. In the final two years of the analysis, the ratio normalized and remained relatively stable, recorded at 14.47 in 2018 and 15.24 in 2019.
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