Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
3M Co., 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).
An analysis of the cash flow metrics from 2017 to 2021 reveals a notable divergence between the steady growth of operational cash generation and the volatility of cash available to equity holders.
- Operating Cash Flow Performance
- Net cash provided by operating activities exhibited a consistent upward trajectory from 2017 through 2020, rising from 6,240 million US$ to a peak of 8,113 million US$. Although a contraction occurred in 2021, with a decrease to 7,454 million US$, the overall trend indicates a sustained capacity to generate liquidity from core business operations.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE demonstrated significant fluctuations throughout the period. A decrease was observed in 2018 to 5,795 million US$, followed by a sharp spike in 2019 to 8,620 million US$. This peak was followed by a substantial decline in 2020, with values remaining relatively stagnant at 4,706 million US$ by the end of 2021.
- Comparative Analysis of Cash Flow Dynamics
- The variance between operating cash flow and FCFE suggests shifting financial strategies. In 2017 and 2019, FCFE exceeded net cash from operating activities, which typically points to net borrowing or the liquidation of assets. In contrast, a marked reversal occurred in 2020 and 2021, where FCFE fell significantly below operating cash flow. This suggests a shift toward higher capital expenditures or aggressive debt repayment during the latter part of the period.
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Price to FCFE Ratio, Current
3M Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 552,742,915 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 4,706) |
| FCFE per share | 8.51 |
| Current share price (P) | 118.50 |
| Valuation Ratio | |
| P/FCFE | 13.92 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 32.29 |
| Eaton Corp. plc | 43.49 |
| GE Aerospace | 42.28 |
| Honeywell International Inc. | 8.73 |
| Lockheed Martin Corp. | 14.27 |
| RTX Corp. | 54.76 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
3M Co., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 571,100,000 | 579,100,000 | 575,600,000 | 575,800,000 | 595,500,000 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 4,706) | 4,737) | 8,620) | 5,795) | 6,470) | |
| FCFE per share3 | 8.24 | 8.18 | 14.98 | 10.06 | 10.86 | |
| Share price1, 4 | 163.64 | 177.10 | 162.89 | 199.84 | 222.89 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 19.86 | 21.65 | 10.88 | 19.86 | 20.51 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 16.36 | — | — | — | — | |
| Eaton Corp. plc | 24.43 | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | 46.23 | — | — | — | — | |
| Lockheed Martin Corp. | 14.65 | — | — | — | — | |
| RTX Corp. | 35.07 | — | — | — | — | |
| P/FCFE, Sector | ||||||
| Capital Goods | — | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Industrials | — | — | — | — | — | |
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
= 4,706,000,000 ÷ 571,100,000 = 8.24
4 Closing price as at the filing date of 3M Co. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 163.64 ÷ 8.24 = 19.86
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio for 3M Co. exhibited significant volatility between 2017 and 2021, reflecting inconsistent correlations between the market valuation and the company's ability to generate cash available to shareholders.
- Share Price Trend
- A general downward trajectory in share price is observed over the five-year period. The price decreased from a high of 222.89 USD in 2017 to 163.64 USD by 2021, with a temporary recovery observed in 2020 when the price rose to 177.10 USD.
- FCFE per Share Dynamics
- Cash flow generation per share demonstrated marked instability. After remaining relatively steady in 2017 and 2018, FCFE per share peaked significantly in 2019 at 14.98 USD. However, a sharp contraction occurred in 2020, where the value dropped to 8.18 USD, remaining nearly stagnant at 8.24 USD in 2021.
- P/FCFE Ratio Analysis
- The P/FCFE ratio fluctuated between a low of 10.88 and a high of 21.65. In 2019, the ratio reached its minimum value of 10.88, driven by the surge in FCFE per share occurring simultaneously with a decline in share price. Conversely, the ratio peaked in 2020 at 21.65, resulting from a combined effect of an increasing share price and a substantial reduction in cash flow per share. By 2021, the ratio returned to 19.86, which is identical to the level recorded in 2018, suggesting a return to a previous valuation baseline despite the lower absolute share price and cash flow levels.
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