Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Devon Energy Corp., 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 financial trajectory between 2018 and 2022 exhibits a transition from significant equity cash deficits to a substantial capital surplus, driven by a sharp increase in operational cash generation during the latter half of the period.
- Net Cash from Operating Activities
- Operational cash flow experienced a moderate decline from 2018 to 2020, reaching a period low of US$ 1,464 million. A significant inflection point occurred in 2021, where cash flow increased to US$ 4,899 million, followed by a further surge to US$ 8,530 million by the end of 2022, representing a substantial expansion in the company's ability to generate cash from its core operations.
- Free Cash Flow to Equity (FCFE)
- FCFE demonstrated a consistent upward trend, recovering from a deficit of US$ -1,449 million in 2018 to a positive US$ 5,988 million in 2022. The transition to positive territory was achieved in 2020 with US$ 311 million, followed by exponential growth in 2021 and 2022.
- Cash Flow Relationship and Capital Discipline
- In the initial years of the analysis, a wide divergence between operating cash flow and FCFE suggests high capital expenditures or debt repayments. However, by 2022, the high correlation between the surge in operating cash and the rise in FCFE indicates a shift toward greater capital discipline and an increased capacity to return value to equity holders.
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Price to FCFE Ratio, Current
Devon Energy Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 640,700,000 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 5,988) |
| FCFE per share | 9.35 |
| Current share price (P) | 44.18 |
| Valuation Ratio | |
| P/FCFE | 4.73 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 18.73 |
| ConocoPhillips | 25.71 |
| ExxonMobil Holdings Corp. | 28.49 |
| P/FCFE, Sector | |
| Oil, Gas & Consumable Fuels | 13.22 |
| P/FCFE, Industry | |
| Energy | 14.02 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Devon Energy Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 654,000,000 | 664,200,000 | 673,100,000 | 382,900,000 | 438,300,000 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 5,988) | 1,608) | 311) | (29) | (1,449) | |
| FCFE per share3 | 9.16 | 2.42 | 0.46 | -0.08 | -3.31 | |
| Share price1, 4 | 57.23 | 53.85 | 21.73 | 22.72 | 30.27 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 6.25 | 22.24 | 47.03 | — | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | 10.59 | 32.05 | — | — | — | |
| ConocoPhillips | 8.93 | 10.61 | — | — | — | |
| ExxonMobil Holdings Corp. | 8.73 | 19.82 | — | — | — | |
| P/FCFE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.33 | 19.75 | — | — | — | |
| P/FCFE, Industry | ||||||
| Energy | 10.19 | 20.81 | — | — | — | |
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
= 5,988,000,000 ÷ 654,000,000 = 9.16
4 Closing price as at the filing date of Devon Energy Corp. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 57.23 ÷ 9.16 = 6.25
6 Click competitor name to see calculations.
Between 2018 and 2022, a significant transformation in cash flow generation and valuation metrics is evident. The trajectory is characterized by a shift from negative free cash flow to equity (FCFE) toward substantial cash surplus, which fundamentally altered the company's valuation profile.
- Share Price Dynamics
- The share price experienced a period of depreciation from 2018 to 2020, falling from 30.27 US$ to 21.73 US$. This trend reversed sharply in 2021, with the price ascending to 53.85 US$ and continuing upward to reach 57.23 US$ by the end of 2022.
- Free Cash Flow to Equity (FCFE) per Share
- A consistent recovery in FCFE per share is observed, moving from a deficit of -3.31 US$ in 2018 to a positive value of 0.46 US$ in 2020. This growth accelerated rapidly in the final two years of the period, culminating in a significant increase to 9.16 US$ per share in 2022.
- Price to FCFE (P/FCFE) Ratio
- The P/FCFE ratio, which was not applicable during the years of negative cash flow, shows a steep downward trend once FCFE turned positive. The ratio declined from 47.03 in 2020 to 22.24 in 2021, and further compressed to 6.25 in 2022. This contraction indicates that the growth in FCFE per share far outpaced the increase in the share price, resulting in a lower valuation multiple relative to cash flow generation.
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