Price to FCFE (P/FCFE)
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Eaton Corp. plc pages available for free this week:
- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Analysis of Debt
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Free Cash Flow to Equity (FCFE)
Eaton Corp. plc, FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net cash provided by operating activities
- There was a decline in net cash provided by operating activities from 2,944 million US dollars in 2020 to 2,163 million in 2021. This was followed by a recovery and upward trend through the subsequent years, rising to 2,533 million in 2022, reaching 3,624 million in 2023, and further increasing to 4,327 million in 2024. Overall, the data indicates a significant improvement in operational cash generation starting in 2022 and continuing through 2024.
- Free cash flow to equity (FCFE)
- Free cash flow to equity showed a different trajectory compared to operating cash flow. It increased from 2,064 million US dollars in 2020 to 2,437 million in 2021, then experienced a slight decline to 2,398 million in 2022. After 2022, FCFE grew substantially, reaching 3,431 million in 2023 and 3,665 million in 2024. This pattern suggests that while FCFE exhibited some volatility early on, it ultimately followed a growth trend, particularly pronounced in the later years.
- Comparison and overall insights
- The operating cash flows and free cash flow to equity both display positive growth trends after the initial fluctuations in 2021 and 2022. The significantly higher operating cash flows relative to FCFE indicate consistent operational strength, with FCFE growth likely reflecting improvements in capital expenditure management or changes in financing activities. The data collectively suggests enhanced financial flexibility and stronger capacity to generate cash available to equity holders in recent years.
Price to FCFE Ratio, Current
Eaton Corp. plc, current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| GE Aerospace | |
| Honeywell International Inc. | |
| Lockheed Martin Corp. | |
| RTX Corp. | |
| P/FCFE, Sector | |
| Capital Goods | |
| P/FCFE, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Eaton Corp. plc, historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/FCFE, Sector | ||||||
| Capital Goods | ||||||
| P/FCFE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Data adjusted for splits and stock dividends.
3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Eaton Corp. plc Annual Report.
5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
- Share Price
- The share price displayed a consistent upward trend over the five-year period. It increased from $132.68 at the end of 2020 to $290.38 by the end of 2024, more than doubling in value. Notably, there was a sharp rise between 2022 and 2023, where the price jumped from $172.78 to $289. This suggests strong market confidence or substantial positive developments influencing investor sentiment in that period.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share showed a gradual but steady increase from $5.18 in 2020 to $9.35 in 2024. There was a slight decline from 2021 to 2022, decreasing from $6.11 to $6.03, but the metric rebounded significantly in 2023 to $8.59, followed by continued growth into 2024. This indicates improving operational cash generation capacity available to equity shareholders over time.
- Price to FCFE (P/FCFE) Ratio
- The P/FCFE ratio exhibited fluctuation throughout the period. It started at 25.59 in 2020, decreased to 24.43 in 2021, then rose notably to 28.68 in 2022. The ratio peaked in 2023 at 33.65 before slightly declining to 31.06 in 2024. This pattern suggests that the market valuation relative to free cash flow became more expensive, particularly during 2023, possibly reflecting heightened investor expectations or reduced perceived risk.
- Overall Insights
- The consistent increase in share price alongside rising FCFE per share signifies improving fundamentals coupled with strong market valuation. The elevated P/FCFE ratios in the latter years indicate increased investor willingness to pay a premium for the company’s cash flows. The sharp share price jump in 2023, alongside a peak in the P/FCFE ratio, may point to a significant event or enhanced future growth expectations at that time. Despite some minor variability in FCFE per share growth, the overall financial health and market perception appear robust and improving through the timeframe considered.