Price to FCFE (P/FCFE)
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Edwards Lifesciences Corp. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Analysis of Debt
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Free Cash Flow to Equity (FCFE)
Edwards Lifesciences Corp., FCFE calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2017-12-31).
The financial data reveals the cash flow performance of the company over a five-year period from 2017 to 2021. There are two main cash flow metrics reported: net cash provided by operating activities and free cash flow to equity (FCFE).
- Net Cash Provided by Operating Activities
- Over the observed period, net cash provided by operating activities shows some fluctuations with an overall increasing trend. It began at approximately $1,000,700 thousand in 2017, decreased slightly to $926,800 thousand in 2018, then increased significantly to $1,179,400 thousand in 2019. It experienced a minor decline in 2020, falling to $1,054,300 thousand, before sharply rising to $1,732,100 thousand in 2021, the highest value in the period. This indicates a strengthening in the company's core operating cash generation capability particularly in the final year.
- Free Cash Flow to Equity (FCFE)
- Free cash flow to equity displays more volatility compared to operating cash flow. Starting strongly at $1,001,500 thousand in 2017, there is a sharp decline in 2018 down to $247,800 thousand. Following this, FCFE shows a recovery trend with substantial increases to $891,000 thousand in 2019 and $646,200 thousand in 2020. By 2021, FCFE rises significantly again to $1,400,500 thousand, representing a strong rebound but still slightly below the 2017 level. The fluctuations may reflect changes in capital expenditures, financing activities, or working capital management impacting the equity holders' residual cash.
Overall, the company’s operating cash flow capability appears robust and improving by the end of the period, while free cash flow to equity is more variable but also demonstrates recovery after a significant dip in 2018. These trends suggest effective operational performance and evolving capital management strategies over the years evaluated.
Price to FCFE Ratio, Current
Edwards Lifesciences Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | |
| CVS Health Corp. | |
| Elevance Health Inc. | |
| Intuitive Surgical Inc. | |
| Medtronic PLC | |
| UnitedHealth Group Inc. | |
| P/FCFE, Sector | |
| Health Care Equipment & Services | |
| P/FCFE, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2021-12-31).
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
Edwards Lifesciences Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | ||||||
| CVS Health Corp. | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| P/FCFE, Sector | ||||||
| Health Care Equipment & Services | ||||||
| P/FCFE, Industry | ||||||
| Health Care | ||||||
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
- Share Price Trend
- The share price demonstrated a consistent upward trajectory from 2017 through 2021. Beginning at $44.61, it progressively increased each year, reaching $107.73 by the end of 2021. This reflects a substantial appreciation in market valuation over the five-year period.
- Free Cash Flow to Equity (FCFE) Per Share Trend
- FCFE per share exhibited volatility within the same timeframe. Starting at $1.59 in 2017, it sharply declined to $0.40 in 2018, recovered to $1.42 in 2019, dipped again to $1.03 in 2020, and finally rose to a peak of $2.25 in 2021. The fluctuations suggest intermittent variations in the company's free cash generated for equity holders.
- Price to FCFE Ratio (P/FCFE) Trend
- The P/FCFE ratio showed significant variability, indicating changing market expectations relative to free cash flows. It was 28.07 in 2017, surged dramatically to 149.06 in 2018 coinciding with the decline in FCFE per share, then fell to 54.11 in 2019. Subsequently, it rose again to 84.71 in 2020 before decreasing to 47.94 in 2021. These fluctuations reflect an inconsistent valuation relative to cash generation, likely influenced by both share price changes and FCFE variability.
- Overall Insights
- While the share price steadily increased, free cash flow per share presented irregular movements, impacting valuation multiples. The elevated P/FCFE ratio in 2018 signifies that despite a low FCFE, the market maintained or increased the share price, leading to a stretched valuation. By 2021, the increase in FCFE per share coupled with continued share price growth resulted in a more moderate and potentially more justified P/FCFE ratio. This pattern suggests the market progressively aligned its valuation metrics with the company’s cash generation capabilities over the period.