Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
EMC Corp., 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).
Analysis of cash flow dynamics between 2011 and 2015 reveals a period of moderate growth in operating activities coupled with significant volatility in free cash flow to equity (FCFE).
- Operating Cash Flow Trends
- Net cash provided by operating activities exhibited a steady increase from 2011 to 2013, rising from US$ 5,669 million to a peak of US$ 6,923 million. This upward trajectory reversed after 2013, with values declining to US$ 6,523 million in 2014 and further decreasing to US$ 5,386 million by the end of 2015, resulting in a final value lower than the initial 2011 level.
- FCFE Volatility and Divergence
- Free cash flow to equity demonstrated substantial fluctuations, characterized by a significant anomaly in 2013 when it surged to US$ 10,929 million. In this period, FCFE exceeded net cash provided by operating activities by approximately US$ 4,006 million, suggesting a substantial impact from reduced capital expenditures or a significant increase in net debt. Following this spike, FCFE corrected sharply to US$ 3,370 million in 2014 before recovering to US$ 5,212 million in 2015.
- Comparative Cash Flow Analysis
- A notable discrepancy is observed between the relative stability of operating cash flows and the erratic nature of FCFE. While operating activities remained within a range of approximately US$ 5.3 billion to US$ 6.9 billion, FCFE fluctuated between US$ 3.3 billion and US$ 10.9 billion. This variance indicates that the cash available to equity holders was influenced more heavily by investment and financing decisions than by core operational performance.
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Price to FCFE Ratio, Current
EMC Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 1,956,842,060 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 5,212) |
| FCFE per share | 2.66 |
| Current share price (P) | 28.45 |
| Valuation Ratio | |
| P/FCFE | 10.68 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Advanced Micro Devices Inc. | 94.18 |
| Analog Devices Inc. | 32.84 |
| Applied Materials Inc. | 42.30 |
| Broadcom Inc. | 57.74 |
| Intel Corp. | — |
| KLA Corp. | 44.91 |
| Lam Research Corp. | 55.94 |
| Marvell Technology Inc. | 64.09 |
| Micron Technology Inc. | 15.18 |
| NVIDIA Corp. | 45.27 |
| Qualcomm Inc. | 12.75 |
| Texas Instruments Inc. | 83.28 |
Based on: 10-K (reporting date: 2015-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
EMC Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 1,947,047,380 | 1,988,086,911 | 2,025,633,308 | 2,104,430,304 | 2,053,084,362 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 5,212) | 3,370) | 10,929) | 3,313) | 4,401) | |
| FCFE per share3 | 2.68 | 1.70 | 5.40 | 1.57 | 2.14 | |
| Share price1, 4 | 25.93 | 28.94 | 25.68 | 23.28 | 27.52 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 9.69 | 17.07 | 4.76 | 14.79 | 12.84 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Advanced Micro Devices Inc. | — | — | — | — | — | |
| Analog Devices Inc. | — | — | — | — | — | |
| Applied Materials Inc. | — | — | — | — | — | |
| Broadcom Inc. | — | — | — | — | — | |
| Intel Corp. | — | — | — | — | — | |
| KLA Corp. | — | — | — | — | — | |
| Lam Research Corp. | — | — | — | — | — | |
| Marvell Technology Inc. | — | — | — | — | — | |
| Micron Technology Inc. | — | — | — | — | — | |
| NVIDIA Corp. | — | — | — | — | — | |
| Qualcomm Inc. | — | — | — | — | — | |
| Texas Instruments 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
= 5,212,000,000 ÷ 1,947,047,380 = 2.68
4 Closing price as at the filing date of EMC Corp. Annual Report.
5 2015 Calculation
P/FCFE = Share price ÷ FCFE per share
= 25.93 ÷ 2.68 = 9.69
6 Click competitor name to see calculations.
The Price to Free Cash Flow to Equity (P/FCFE) ratio exhibits significant volatility between 2011 and 2015. The fluctuations in this valuation multiple are primarily driven by substantial instability in the FCFE per share rather than consistent trends in the share price.
- Share Price Performance
- The share price remained relatively range-bound, fluctuating between a low of 23.28 in 2012 and a peak of 28.94 in 2014. This relative stability suggests that market sentiment remained consistent, whereas the underlying cash flow metrics varied widely.
- FCFE per Share Volatility
- A high degree of variance is observed in the FCFE per share. A notable spike occurred in 2013, reaching 5.40, which was followed by a sharp contraction to 1.70 in 2014. This instability indicates inconsistent cash generation available to equity holders over the period analyzed.
- P/FCFE Ratio Analysis
- The P/FCFE ratio reached its lowest point of 4.76 in 2013, directly correlating with the peak in FCFE per share. Conversely, the ratio peaked at 17.07 in 2014, coinciding with a sharp drop in FCFE and a peak in share price. By 2015, the ratio moderated to 9.69 as FCFE recovered to 2.68 and the share price declined to 25.93.
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