Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
General Dynamics Corp., FCFE calculation
US$ in millions
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).
The cash flow profile of General Dynamics Corp. between 2015 and 2019 is characterized by relatively stable operating cash flows contrasted with significant volatility in free cash flow to equity (FCFE).
- Net Cash Provided by Operating Activities
- Operating cash flows remained within a range of 2,198 million to 3,879 million US dollars. A peak was reached in 2017, followed by a moderate decline and stabilization around 2,981 million US dollars by 2019. The consistency of these figures suggests a steady core operational capacity to generate cash throughout the period.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE exhibited a highly non-linear trajectory. After a period of steady growth from 2015 to 2017, a substantial anomaly occurred in 2018, where FCFE surged to 10,769 million US dollars. This peak was followed by a sharp contraction in 2019, with values falling to 1,144 million US dollars, representing the lowest level within the five-year analyzed period.
- Comparative Analysis of FCFE and Operating Cash Flow
- While FCFE generally tracked the movement of operating cash flows from 2015 through 2017, a severe divergence is observed in 2018. In that year, FCFE significantly exceeded net cash provided by operating activities, which typically indicates an influx of cash from net borrowing or a sharp reduction in capital expenditures. The subsequent drop in 2019, where FCFE fell well below operating cash levels, suggests a reversal of those financing activities or a significant increase in capital reinvestment.
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Price to FCFE Ratio, Current
General Dynamics Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 286,972,150 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 1,144) |
| FCFE per share | 3.99 |
| Current share price (P) | 132.43 |
| Valuation Ratio | |
| P/FCFE | 33.22 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 30.73 |
| Eaton Corp. plc | 42.99 |
| GE Aerospace | 44.70 |
| Honeywell International Inc. | 8.72 |
| Lockheed Martin Corp. | 14.53 |
| RTX Corp. | 56.59 |
Based on: 10-K (reporting date: 2019-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
General Dynamics Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 289,627,333 | 288,235,928 | 296,933,621 | 302,742,234 | 311,161,810 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 1,144) | 10,769) | 3,536) | 2,298) | 1,430) | |
| FCFE per share3 | 3.95 | 37.36 | 11.91 | 7.59 | 4.60 | |
| Share price1, 4 | 186.25 | 173.48 | 209.53 | 183.04 | 132.26 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 47.15 | 4.64 | 17.60 | 24.11 | 28.78 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | — | — | — | — | — | |
| Eaton Corp. plc | — | — | — | — | — | |
| GE Aerospace | — | — | — | — | — | |
| Honeywell International Inc. | — | — | — | — | — | |
| Lockheed Martin Corp. | — | — | — | — | — | |
| RTX 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
= 1,144,000,000 ÷ 289,627,333 = 3.95
4 Closing price as at the filing date of General Dynamics Corp. Annual Report.
5 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 186.25 ÷ 3.95 = 47.15
6 Click competitor name to see calculations.
The financial trajectory of General Dynamics Corp. between 2015 and 2019 is characterized by significant volatility in Free Cash Flow to Equity (FCFE) and a resulting erratic movement in the Price to FCFE (P/FCFE) ratio.
- Share Price Trends
- The share price exhibited a general upward trend from 2015 to 2017, peaking at 209.53 US$. A correction occurred in 2018, with the price dropping to 173.48 US$, followed by a partial recovery to 186.25 US$ by the end of 2019.
- FCFE per Share Volatility
- FCFE per share showed consistent growth from 2015 (4.60 US$) through 2017 (11.91 US$). A substantial and anomalous spike occurred in 2018, reaching 37.36 US$, which represents a more than threefold increase from the previous year. This was followed by a sharp contraction in 2019, where FCFE per share fell to its lowest point in the five-year period at 3.95 US$.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio inversely tracked the movements of FCFE. From 2015 to 2018, the ratio declined steadily from 28.78 to a period low of 4.64. This decline was primarily driven by the expansion of FCFE relative to the share price. However, the collapse of FCFE in 2019 caused the P/FCFE ratio to surge to 47.15, indicating a significant divergence between the market valuation and the equity's cash flow generation for that year.
The data suggests that while the share price remained relatively stable within a specific range, the underlying cash flow available to shareholders experienced extreme fluctuations. The outlier observed in 2018 suggests a non-recurring event that temporarily deflated the P/FCFE ratio, while the 2019 figures indicate a period of constrained cash flow that significantly inflated the valuation multiple.
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