Stock Analysis on Net
Stock Analysis on Net

Abbott Laboratories (NYSE:ABT)

Enterprise Value to FCFF (EV/FCFF)

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Free Cash Flow to The Firm (FCFF)

Abbott Laboratories, FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net earnings 4,495  3,687  2,368  477  1,400 
Net noncash charges 4,298  3,780  4,080  3,178  3,316 
(Increase) decrease in operating capital (892) (1,331) (148) 1,915  (1,513)
Net cash from operating activities 7,901  6,136  6,300  5,570  3,203 
Interest paid, net of tax1 497  598  739  746  136 
Acquisitions of property and equipment (2,177) (1,638) (1,394) (1,135) (1,121)
Free cash flow to the firm (FCFF) 6,221  5,096  5,645  5,181  2,218 

Based on: 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), 10-K (reporting date: 2016-12-31).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Abbott Laboratories suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Abbott Laboratories FCFF decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Interest Paid, Net of Tax

Abbott Laboratories, interest paid, net of tax calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Effective Income Tax Rate (EITR)
EITR1 9.50% 11.70% 12.50% 18.70% 24.80%
Interest Paid, Net of Tax
Interest paid, before tax 549  677  845  917  181 
Less: Interest paid, tax2 52  79  106  171  45 
Interest paid, net of tax 497  598  739  746  136 

Based on: 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), 10-K (reporting date: 2016-12-31).

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2 2020 Calculation
Interest paid, tax = Interest paid × EITR
= 549 × 9.50% = 52

Enterprise Value to FCFF Ratio, Current

Abbott Laboratories, current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Selected Financial Data (US$ in millions)
Enterprise value (EV) 234,322 
Free cash flow to the firm (FCFF) 6,221 
Valuation Ratio
EV/FCFF 37.67
Benchmarks
EV/FCFF, Competitors1
Anthem Inc. 9.41
Becton, Dickinson & Co. 23.18
Bristol-Myers Squibb Co. 12.08
CVS Health Corp. 12.09
Danaher Corp. 38.43
Edwards Lifesciences Corp. 104.57
HCA Healthcare Inc. 13.71
Intuitive Surgical Inc. 79.77
Medtronic PLC 29.06
Stryker Corp. 35.23
UnitedHealth Group Inc. 21.33
EV/FCFF, Sector
Health Care Equipment & Services 20.81
EV/FCFF, Industry
Health Care 22.52

Based on: 10-K (reporting date: 2020-12-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Enterprise Value to FCFF Ratio, Historical

Abbott Laboratories, historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 229,787  168,424  149,398  123,592  80,634 
Free cash flow to the firm (FCFF)2 6,221  5,096  5,645  5,181  2,218 
Valuation Ratio
EV/FCFF3 36.94 33.05 26.46 23.86 36.35
Benchmarks
EV/FCFF, Competitors4
Anthem Inc. 6.04 12.73 24.58 13.91 12.29
Becton, Dickinson & Co. 25.12 30.47 33.39 26.24 20.34
Bristol-Myers Squibb Co. 11.63 23.39 15.74 24.15 51.76
CVS Health Corp. 9.42 12.30 17.89 14.20 12.09
Danaher Corp. 30.66 37.11 25.21 25.94 26.16
Edwards Lifesciences Corp. 81.12 51.46 51.20 33.02 37.28
HCA Healthcare Inc. 11.93 17.25 18.06 19.24 15.73
Intuitive Surgical Inc. 76.70 54.58 57.79 47.07 25.06
Medtronic PLC 21.43 22.07 27.88 21.24 26.12
Stryker Corp. 33.98 49.82 32.91 50.00 33.54
UnitedHealth Group Inc. 15.82 17.51 18.63 18.98 19.38
EV/FCFF, Sector
Health Care Equipment & Services 17.56 21.64 22.68 21.53 21.58
EV/FCFF, Industry
Health Care 19.32 20.10 19.46 19.42 17.72

Based on: 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), 10-K (reporting date: 2016-12-31).

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3 2020 Calculation
EV/FCFF = EV ÷ FCFF
= 229,787 ÷ 6,221 = 36.94

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. Abbott Laboratories EV/FCFF ratio increased from 2018 to 2019 and from 2019 to 2020.