Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
EOG Resources Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Between 2015 and 2019, the company experienced a substantial expansion in operating cash generation and a pivotal transition in its free cash flow to equity (FCFE) profile, moving from a period of cash consumption to one of cash generation.
- Operating Cash Flow Trends
- Net cash provided by operating activities demonstrated a strong growth trajectory over the five-year period. Following a decline from 3.59 billion in 2015 to 2.36 billion in 2016, operating cash flows grew consistently, peaking at 8.16 billion in 2019. The most significant acceleration occurred between 2017 and 2018, where cash provided by operations increased by approximately 82%.
- FCFE Volatility and Transition
- Free cash flow to equity remained negative for three consecutive years from 2015 to 2017, with the most significant deficit occurring in 2015 at 674 million. A structural shift is observed in 2018, as FCFE turned positive, reaching 1.34 billion. Although FCFE decreased to 835.6 million in 2019, it remained positive, indicating a sustained ability to generate surplus cash after accounting for capital expenditures and debt obligations.
- Analysis of Cash Flow Divergence
- A notable divergence existed between operating cash flows and FCFE between 2015 and 2017. Despite positive operating cash flows, the negative FCFE suggests that capital expenditures or net debt repayments exceeded the cash generated from operations during this phase. The convergence toward positive FCFE in 2018 suggests a strategic shift toward capital discipline or a reduction in the intensity of capital investments relative to the growth in operating cash flows.
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Price to FCFE Ratio, Current
EOG Resources Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 582,054,451 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 835,638) |
| FCFE per share | 1.44 |
| Current share price (P) | 60.00 |
| Valuation Ratio | |
| P/FCFE | 41.79 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 18.09 |
| ConocoPhillips | 24.55 |
| Exxon Mobil Corp. | 28.17 |
Based on: 10-K (reporting date: 2019-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
EOG Resources Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 582,054,451 | 580,053,225 | 578,636,343 | 576,832,077 | 549,883,390 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 835,638) | 1,342,133) | (458,906) | (57,784) | (674,006) | |
| FCFE per share3 | 1.44 | 2.31 | -0.79 | -0.10 | -1.23 | |
| Share price1, 4 | 60.00 | 93.91 | 106.94 | 97.91 | 68.50 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 41.79 | 40.59 | — | — | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 Data adjusted for splits and stock dividends.
3 2019 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 835,638,000 ÷ 582,054,451 = 1.44
4 Closing price as at the filing date of EOG Resources Inc. Annual Report.
5 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 60.00 ÷ 1.44 = 41.79
6 Click competitor name to see calculations.
The financial performance between 2015 and 2019 is characterized by a significant transition in cash flow generation and subsequent volatility in equity valuation. A critical shift occurred as the entity moved from a period of negative Free Cash Flow to Equity (FCFE) to a period of positive cash generation starting in 2018.
- FCFE per Share Trend
- From 2015 to 2017, FCFE per share remained negative, indicating that cash outflows for capital expenditures and debt repayments exceeded cash flows from operations. While there was a momentary improvement in 2016, the value returned to a deficit in 2017. A pivot to positive territory was achieved in 2018 with a value of 2.31 US$, followed by a decrease to 1.44 US$ in 2019.
- Share Price Volatility
- The share price exhibited an upward trajectory from 2015 to 2017, peaking at 106.94 US$. This growth was followed by a steady decline through 2018 and a sharp reduction in 2019, where the price fell to 60.00 US$, representing a significant contraction from its peak valuation.
- Price to FCFE (P/FCFE) Interpretation
- The P/FCFE ratio was not applicable during the initial three-year period due to negative FCFE. Upon the transition to positive cash flows in 2018, the ratio was established at 40.59. By 2019, the ratio increased slightly to 41.79. This increase occurred despite a substantial drop in the share price, as the decline in FCFE per share from 2.31 US$ to 1.44 US$ was more pronounced than the corresponding decrease in the market price.
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