Price to FCFE (P/FCFE)
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).
An analysis of the financial performance from 2017 to 2021 reveals a general upward trend in cash generation, although Free Cash Flow to Equity (FCFE) exhibited significant volatility relative to the more consistent growth observed in net cash provided by operating activities.
- Net Cash Provided by Operating Activities
- Operating cash flow demonstrated a positive long-term trajectory, increasing from 1,000,700 thousand USD in 2017 to 1,732,100 thousand USD in 2021. Despite marginal contractions in 2018 and 2020, the overall trend indicates a robust capacity to generate cash from core business operations, with a notable acceleration in cash production during the 2021 fiscal year.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE experienced substantial fluctuations throughout the analyzed period. From a high of 1,001,500 thousand USD in 2017, a sharp decline occurred in 2018, with values falling to 247,800 thousand USD. A recovery phase followed in 2019 (891,000 thousand USD) and a subsequent dip in 2020 (646,200 thousand USD), before reaching a peak of 1,400,500 thousand USD in 2021.
- Operating Cash Flow and FCFE Correlation
- A divergence between operating cash flow and FCFE is most prominent in 2018 and 2020. The disparity suggests that during these intervals, a larger portion of operating cash was utilized for capital expenditures or net debt repayments. Conversely, in 2017 and 2021, FCFE closely aligned with operating cash flow, indicating a higher conversion rate of operating liquidity into cash available to equity holders.
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Price to FCFE Ratio, Current
Edwards Lifesciences Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 623,207,437 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,400,500) |
| FCFE per share | 2.25 |
| Current share price (P) | 107.73 |
| Valuation Ratio | |
| P/FCFE | 47.94 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | 32.90 |
| Elevance Health Inc. | 24.18 |
| Intuitive Surgical Inc. | 63.02 |
| Medtronic PLC | 30.62 |
| UnitedHealth Group Inc. | 21.02 |
| P/FCFE, Sector | |
| Health Care Equipment & Services | 19.70 |
| P/FCFE, Industry | |
| Health Care | 28.09 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Edwards Lifesciences Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 623,207,437 | 624,518,873 | 627,367,734 | 623,298,987 | 630,071,124 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,400,500) | 646,200) | 891,000) | 247,800) | 1,001,500) | |
| FCFE per share3 | 2.25 | 1.03 | 1.42 | 0.40 | 1.59 | |
| Share price1, 4 | 107.73 | 87.65 | 76.85 | 59.26 | 44.61 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 47.94 | 84.71 | 54.11 | 149.06 | 28.07 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | 24.52 | — | — | — | — | |
| Elevance Health Inc. | 11.07 | — | — | — | — | |
| Intuitive Surgical Inc. | 58.39 | — | — | — | — | |
| Medtronic PLC | 38.91 | — | — | — | — | |
| UnitedHealth Group Inc. | 20.11 | — | — | — | — | |
| P/FCFE, Sector | ||||||
| Health Care Equipment & Services | 22.14 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Health Care | 17.94 | — | — | — | — | |
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
= 1,400,500,000 ÷ 623,207,437 = 2.25
4 Closing price as at the filing date of Edwards Lifesciences Corp. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 107.73 ÷ 2.25 = 47.94
6 Click competitor name to see calculations.
Analysis of the valuation metrics between 2017 and 2021 reveals a divergence between consistent share price appreciation and volatile Free Cash Flow to Equity (FCFE).
- Share Price Performance
- A sustained upward trajectory is observed, with the share price increasing from 44.61 US$ in 2017 to 107.73 US$ by 2021. This represents a consistent and steady growth pattern in market valuation over the five-year period.
- FCFE per Share Volatility
- Free cash flow available to equity holders exhibited significant instability. Following an initial value of 1.59 US$ in 2017, a substantial decline to 0.40 US$ occurred in 2018. Recovery was observed in 2019 at 1.42 US$, followed by a minor contraction to 1.03 US$ in 2020, and concluding with a period high of 2.25 US$ in 2021.
- P/FCFE Ratio Dynamics
- The P/FCFE ratio reflects the high sensitivity of the valuation multiple to fluctuations in cash flow. The ratio peaked at 149.06 in 2018, a result of the sharp decrease in FCFE per share occurring simultaneously with a rising share price. Subsequent years showed a correction in the multiple, although the ratio remained elevated relative to the 2017 baseline of 28.07, eventually settling at 47.94 in 2021.
The overall trend indicates that while the market maintained a positive outlook on the equity price, the underlying cash flow generation was inconsistent. This discrepancy resulted in an unstable P/FCFE ratio, which only began to normalize toward the end of the observed period as FCFE per share reached its highest level.
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