Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Allergan Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities exhibited a marked upward trend over the five-year period. Starting at approximately $464 million in 2010, the figure more than doubled by 2011 to about $1.08 billion. This positive trajectory continued, reaching nearly $1.6 billion in 2012 and approximately $1.7 billion in 2013. The upward momentum persisted in 2014, culminating in nearly $1.93 billion. This consistent growth suggests improving operational efficiency and the ability to generate increasingly robust cash flows from core business activities.
- Free Cash Flow to Equity (FCFE)
- The free cash flow to equity showed more variability compared to operating cash flow. It began at $956 million in 2010, sharply decreased to $175 million in 2011, indicating possible increased capital expenditures, debt repayments, or other financing activities impacting available cash to equity holders. However, FCFE rebounded substantially in 2012, rising to about $1.41 billion and then further to $2.11 billion in 2013, exceeding previous years' figures. In 2014, it declined moderately to roughly $1.67 billion but remained at a relatively high level overall. The fluctuations in FCFE suggest periods of significant investment or financing activities influencing the cash available to equity holders despite the steady growth in operating cash flows.
- Overall Analysis
- The company demonstrated strong growth in cash generated from operations over the analyzed period, reflecting effective business performance. However, the variability in free cash flow to equity highlights that cash available to internal and external equity stakeholders was influenced by other financial activities beyond operational performance. After an initial dip in 2011, FCFE improved substantially, indicating a recovery in free cash utilization capacity. This pattern implies strategic investment or financing decisions that impacted cash flow distribution but ultimately supported increased shareholder cash flows in later years.
Price to FCFE Ratio, Current
Allergan Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 300,237,694 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,666,900) |
| FCFE per share | 5.55 |
| Current share price (P) | 231.12 |
| Valuation Ratio | |
| P/FCFE | 41.63 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | 13.13 |
| Amgen Inc. | 25.64 |
| Bristol-Myers Squibb Co. | 3.93 |
| Danaher Corp. | 37.92 |
| Eli Lilly & Co. | 57.77 |
| Gilead Sciences Inc. | 11.50 |
| Johnson & Johnson | 12.49 |
| Merck & Co. Inc. | 10.03 |
| Pfizer Inc. | 52.29 |
| Regeneron Pharmaceuticals Inc. | 16.06 |
| Thermo Fisher Scientific Inc. | 32.06 |
| Vertex Pharmaceuticals Inc. | — |
Based on: 10-K (reporting date: 2014-12-31).
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
Allergan Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 300,237,694 | 298,467,649 | 298,083,478 | 304,442,771 | 305,677,123 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,666,900) | 2,112,400) | 1,405,300) | 174,800) | 955,800) | |
| FCFE per share3 | 5.55 | 7.08 | 4.71 | 0.57 | 3.13 | |
| Share price1, 4 | 231.12 | 125.54 | 107.05 | 88.82 | 72.90 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 41.63 | 17.74 | 22.71 | 154.69 | 23.31 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | — | — | — | — | — | |
| Amgen Inc. | — | — | — | — | — | |
| Bristol-Myers Squibb Co. | — | — | — | — | — | |
| Danaher Corp. | — | — | — | — | — | |
| Eli Lilly & Co. | — | — | — | — | — | |
| Gilead Sciences Inc. | — | — | — | — | — | |
| Johnson & Johnson | — | — | — | — | — | |
| Merck & Co. Inc. | — | — | — | — | — | |
| Pfizer Inc. | — | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | — | — | — | — | — | |
| Thermo Fisher Scientific Inc. | — | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31).
1 Data adjusted for splits and stock dividends.
3 2014 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,666,900,000 ÷ 300,237,694 = 5.55
4 Closing price as at the filing date of Allergan Inc. Annual Report.
5 2014 Calculation
P/FCFE = Share price ÷ FCFE per share
= 231.12 ÷ 5.55 = 41.63
6 Click competitor name to see calculations.
- Share Price Trend
- The share price exhibited a consistent and significant upward trajectory over the five-year period. Starting at $72.90 at the end of 2010, the value rose steadily each year, reaching $231.12 by the end of 2014. This represents a more than threefold increase, indicating strong market confidence or favorable company performance.
- Free Cash Flow to Equity (FCFE) per Share
- The FCFE per share demonstrated notable variability during the same period. It began at $3.13 in 2010 but dropped sharply to $0.57 in 2011. However, following this dip, the FCFE per share increased substantially in the subsequent years, climbing to $4.71 in 2012 and reaching a peak of $7.08 in 2013 before a slight decline to $5.55 in 2014. This pattern suggests some volatility in free cash flows but an overall increasing trend after the initial drop.
- Price to FCFE (P/FCFE) Ratio
- The P/FCFE ratio experienced considerable fluctuations throughout the period. It was relatively moderate at 23.31 in 2010 but surged drastically to 154.69 in 2011, which corresponds to the year with the lowest FCFE per share, indicating potential market overvaluation or transient cash flow weakness. Subsequently, the ratio decreased sharply to 22.71 in 2012 and continued to decline to 17.74 in 2013, reflecting improved free cash flows relative to the share price. In 2014, the ratio increased again to 41.63, still well below the 2011 peak but higher than in 2012 and 2013, suggesting a higher market valuation relative to cash flow in the final year analyzed.
- Overall Insights
- The data reveals strong share price growth accompanied by fluctuating free cash flow performance. The initial year showed weak cash generation contrasted with rising stock prices, leading to a stretched valuation in 2011. Afterward, cash flows improved significantly, improving valuation measures. Despite some volatility, the company's market value increased substantially, but the higher P/FCFE ratio in 2014 may warrant further investigation into valuation sustainability relative to cash flows.