General Dynamics Corp. (NYSE:GD)

The analysis of the financial data over the period from December 31, 2015, to December 31, 2019, reveals notable trends in the company's cash flow metrics.

Net Cash Provided by Operating Activities

There is a fluctuation in the net cash provided by operating activities throughout the years. Beginning at approximately 2,499 million US dollars in 2015, this figure decreased to 2,198 million US dollars in 2016. It then experienced a significant increase in 2017, reaching 3,879 million US dollars, and subsequently declined again in 2018 to 3,148 million US dollars. In 2019, the net cash provided by operating activities showed a slight decrease to 2,981 million US dollars. Overall, while there is no consistent upward or downward trajectory, the figures reflect variability with peaks in 2017 and 2018.

Free Cash Flow to Equity (FCFE)

The free cash flow to equity shows a generally increasing trend from 2015 through 2018, albeit with considerable volatility. Starting at 1,430 million US dollars in 2015, the FCFE rose sharply to 2,298 million US dollars in 2016 and further to 3,536 million US dollars in 2017. A substantial surge is observed in 2018, with FCFE peaking at 10,769 million US dollars, representing a significant increase compared to prior years. However, this level was not sustained into 2019, where FCFE dramatically dropped to 1,144 million US dollars, the lowest value in the examined period except for 2015. This pattern indicates a highly irregular cash flow dynamic affecting equity holders, with a marked peak followed by contraction.

In summary, while operating cash flows demonstrate moderate volatility with no clear directional trend, free cash flow to equity is characterized by pronounced fluctuations, culminating in a dramatic spike and subsequent sharp decline. These patterns may reflect underlying operational or investment activities affecting cash availability and distribution to equity holders across the years.

The share price exhibited an overall upward trend from 2015 to 2019, starting at $132.26 and reaching a peak of $209.53 in 2017 before experiencing a decline in 2018 to $173.48 and then recovering to $186.25 in 2019. This pattern indicates some volatility but generally positive growth over the five-year period.

The Free Cash Flow to Equity (FCFE) per share demonstrated significant fluctuations. It increased steadily from $4.60 in 2015 to $11.91 in 2017, followed by a sharp rise to $37.36 in 2018, suggesting a substantial improvement in cash flow available to shareholders during that year. However, in 2019, FCFE per share dropped dramatically to $3.95, indicating considerable variability in the company's cash generation ability.

The Price to FCFE (P/FCFE) ratio mirrored the volatility seen in the FCFE per share. The ratio decreased from 28.78 in 2015 to 4.64 in 2018, reflecting a growing valuation relative to the increasing FCFE per share, especially notable during the peak FCFE year. In 2019, the P/FCFE ratio spiked to 47.15, which corresponds to the decline in FCFE per share despite the relatively stable share price, suggesting that the market valuation became relatively expensive in terms of cash flow generated per share.

Overall, the data reveal a period of fluctuating free cash flow coupled with a share price that shows moderate growth but with volatility. The P/FCFE ratio's movements indicate changing investor perceptions regarding the company's cash flow performance and valuation, with the most significant deviation occurring in the final reported year.