Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Colgate-Palmolive Co., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 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).
The analysis of cash flow dynamics from 2018 to 2022 reveals a divergent relationship between operational cash generation and the cash available to equity holders. While operational cash flows exhibited a peak in 2020 followed by a contraction, the free cash flow to equity demonstrated significant volatility, characterized by sharp fluctuations that did not consistently align with operational performance.
- Net Cash Provided by Operations
- A growth phase is observed from 2018 to 2020, with values rising from 3,056 million to a peak of 3,719 million. However, a subsequent downward trend occurred, with a notable decline to 2,556 million by December 31, 2022, indicating a reduction in the cash generated from core business activities over the final two years of the period.
- Free Cash Flow to Equity (FCFE)
- FCFE exhibited an inconsistent trajectory. A substantial spike occurred in 2019, reaching 4,231 million, followed by a sharp correction to 2,712 million in 2020 and a further slight dip to 2,583 million in 2021. A recovery is noted in 2022, where FCFE increased to 3,507 million, marking a significant rebound despite the simultaneous decline in operational cash flows.
- Correlation and Financing Insights
- The variance between net cash provided by operations and FCFE suggests shifts in capital expenditure and financing activities. In 2019 and 2022, FCFE exceeded operational cash flow, which typically indicates a reduction in capital expenditures or a net increase in debt. In contrast, during 2020 and 2021, FCFE was lower than operational cash flow, suggesting a period of higher capital investment or debt repayment.
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Price to FCFE Ratio, Current
Colgate-Palmolive Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 826,691,529 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 3,507) |
| FCFE per share | 4.24 |
| Current share price (P) | 75.62 |
| Valuation Ratio | |
| P/FCFE | 17.83 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Procter & Gamble Co. | 25.49 |
| P/FCFE, Industry | |
| Consumer Staples | 40.84 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Colgate-Palmolive Co., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 830,378,790 | 840,487,222 | 848,562,678 | 855,029,777 | 861,676,494 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 3,507) | 2,583) | 2,712) | 4,231) | 2,441) | |
| FCFE per share3 | 4.22 | 3.07 | 3.20 | 4.95 | 2.83 | |
| Share price1, 4 | 72.77 | 79.15 | 78.72 | 76.27 | 66.70 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 17.23 | 25.75 | 24.63 | 15.41 | 23.55 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Procter & Gamble Co. | 22.37 | 29.39 | — | — | — | |
| P/FCFE, Industry | ||||||
| Consumer Staples | 25.27 | 24.83 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,507,000,000 ÷ 830,378,790 = 4.22
4 Closing price as at the filing date of Colgate-Palmolive Co. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 72.77 ÷ 4.22 = 17.23
6 Click competitor name to see calculations.
The analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio between 2018 and 2022 reveals significant volatility in valuation metrics, driven by fluctuations in both equity pricing and per-share cash flow generation.
- Share Price Performance
- The share price exhibited a consistent upward trajectory from 2018 to 2021, rising from 66.70 US$ to a peak of 79.15 US$. However, this trend reversed in 2022, with the price retreating to 72.77 US$, indicating a correction in market valuation toward the end of the period.
- FCFE per Share Variability
- Free Cash Flow to Equity per share showed non-linear movements, peaking at 4.95 US$ in 2019 before contracting to 3.20 US$ and 3.07 US$ in 2020 and 2021, respectively. A recovery was observed in 2022, where the value rose to 4.22 US$, suggesting an improvement in the company's ability to generate cash available to shareholders.
- P/FCFE Ratio Trends
- The P/FCFE ratio experienced substantial shifts, moving from 23.55 in 2018 to a low of 15.41 in 2019, primarily due to the spike in FCFE per share. The ratio subsequently climbed to a period high of 25.75 in 2021, coinciding with the peak share price and depressed cash flow per share. By 2022, the ratio contracted to 17.23, reflecting the combined impact of a declining share price and an increase in FCFE per share.
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