Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Baxter International Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2015-12-31), 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).
The financial performance from 2011 to 2015 is characterized by a period of initial stability in operating cash flows followed by significant volatility in cash flows available to equity holders.
- Cash Flows from Operations
- A consistent upward trajectory was maintained between 2011 and 2014, with values increasing from 2,817 million to a peak of 3,215 million. This period of growth was followed by a sharp contraction in 2015, where cash flows from operations declined to 1,129 million, marking a substantial reduction in the cash generated from core business activities.
- Free Cash Flow to Equity (FCFE)
- The FCFE exhibited high variance over the five-year period. Following modest growth between 2011 and 2012, a significant surge occurred in 2013, reaching 4,769 million. A sharp reversal followed in 2014, with FCFE dropping to 1,204 million, before rebounding to 2,735 million in 2015.
- Operating Cash Flow and FCFE Correlation
- A notable divergence between operating cash flows and FCFE is observed in several periods. In 2013 and 2015, FCFE exceeded cash flows from operations, suggesting that the company likely engaged in net borrowing or asset divestitures to increase equity-available cash. Conversely, in 2014, FCFE was significantly lower than operating cash flows, indicating a period of intensified capital expenditures or substantial debt repayments.
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Price to FCFE Ratio, Current
Baxter International Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 543,887,683 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 2,735) |
| FCFE per share | 5.03 |
| Current share price (P) | 48.08 |
| Valuation Ratio | |
| P/FCFE | 9.56 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | 34.00 |
| Elevance Health Inc. | 24.54 |
| Intuitive Surgical Inc. | 65.21 |
| Medtronic PLC | 31.54 |
| UnitedHealth Group Inc. | 21.10 |
Based on: 10-K (reporting date: 2015-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Baxter International Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 547,871,849 | 542,581,466 | 543,187,695 | 545,928,648 | 560,346,203 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 2,735) | 1,204) | 4,769) | 2,710) | 2,590) | |
| FCFE per share3 | 4.99 | 2.22 | 8.78 | 4.96 | 4.62 | |
| Share price1, 4 | 39.43 | 68.67 | 69.29 | 66.42 | 56.59 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 7.90 | 30.95 | 7.89 | 13.38 | 12.24 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | — | — | — | — | — | |
| Elevance Health Inc. | — | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | — | — | — | — | — | |
| UnitedHealth Group Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 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).
1 Data adjusted for splits and stock dividends.
3 2015 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,735,000,000 ÷ 547,871,849 = 4.99
4 Closing price as at the filing date of Baxter International Inc. Annual Report.
5 2015 Calculation
P/FCFE = Share price ÷ FCFE per share
= 39.43 ÷ 4.99 = 7.90
6 Click competitor name to see calculations.
The financial performance from 2011 to 2015 is characterized by significant volatility in cash flow generation and a subsequent sharp adjustment in market valuation toward the end of the period.
- Share Price Trends
- A gradual appreciation in share price occurred between 2011 and 2013, rising from 56.59 US$ to a peak of 69.29 US$. The price remained relatively stable through 2014 at 68.67 US$, followed by a substantial decline in 2015 to 39.43 US$, representing a significant market correction.
- Free Cash Flow to Equity (FCFE) Dynamics
- FCFE per share exhibited high variability. After a modest increase from 4.62 US$ in 2011 to 4.96 US$ in 2012, a sharp spike to 8.78 US$ was recorded in 2013. This was followed by a severe contraction to 2.22 US$ in 2014, before recovering to 4.99 US$ in 2015.
- Price to FCFE (P/FCFE) Ratio Analysis
- The P/FCFE ratio reflected a decoupling of market valuation from cash flow during the mid-period. The ratio shifted from 12.24 in 2011 to 7.89 in 2013 as FCFE surged. In 2014, the ratio reached an anomalous peak of 30.95, driven by the precipitous drop in FCFE per share while the share price remained high. By 2015, the ratio returned to 7.90, as the share price declined and cash flow recovered, effectively resetting the valuation multiple to 2013 levels.
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