Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Hershey Co., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 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).
- Net Cash Provided by Operating Activities
- The net cash provided by operating activities exhibited an overall increasing trend from 2018 to 2022. Starting at approximately 1.6 billion USD in 2018, it rose to about 1.76 billion USD in 2019, followed by a slight decline to around 1.7 billion USD in 2020. After this dip, there was a notable increase in 2021 to over 2.08 billion USD, continuing to grow to approximately 2.33 billion USD in 2022. This pattern suggests growing operational efficiency and cash-generating ability over the five-year period, notwithstanding the minor decline in 2020.
- Free Cash Flow to Equity (FCFE)
- The free cash flow to equity demonstrated more volatility compared to operating cash flow. It started at 2.21 billion USD in 2018, sharply declined to 1.26 billion USD in 2019, then recovered to 1.59 billion USD in 2020. Subsequent growth was observed in 2021, with FCFE reaching 2.02 billion USD, before falling again to approximately 1.56 billion USD in 2022. These fluctuations may reflect variations in capital expenditures, financing activities, or working capital changes affecting the cash available to equity shareholders.
- Comparative Observations
- While operating cash flow steadily improved, free cash flow to equity did not follow a consistent upward trajectory, indicating that elements beyond operating performance are influencing equity cash flow. The disparity suggests that investments or financial policies outside of operations had a notable impact on free cash flow, resulting in episodic declines despite increasing operational cash generation.
Price to FCFE Ratio, Current
Hershey Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 204,467,895 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,557,982) |
| FCFE per share | 7.62 |
| Current share price (P) | 233.56 |
| Valuation Ratio | |
| P/FCFE | 30.65 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Coca-Cola Co. | 40.55 |
| Mondelēz International Inc. | 36.01 |
| PepsiCo Inc. | 23.18 |
| Philip Morris International Inc. | 27.72 |
| P/FCFE, Sector | |
| Food, Beverage & Tobacco | 18.73 |
| P/FCFE, Industry | |
| Consumer Staples | 34.13 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Hershey Co., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 204,035,956 | 205,241,853 | 207,165,543 | 209,749,611 | 208,519,794 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,557,982) | 2,016,593) | 1,585,199) | 1,260,943) | 2,206,198) | |
| FCFE per share3 | 7.64 | 9.83 | 7.65 | 6.01 | 10.58 | |
| Share price1, 4 | 240.69 | 202.59 | 151.29 | 160.11 | 110.22 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 31.52 | 20.62 | 19.77 | 26.63 | 10.42 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Coca-Cola Co. | 29.91 | 23.29 | 30.91 | — | — | |
| Mondelēz International Inc. | 14.10 | 30.57 | 20.76 | — | — | |
| PepsiCo Inc. | 47.17 | 77.00 | 10.51 | — | — | |
| Philip Morris International Inc. | 6.64 | 20.46 | 15.06 | — | — | |
| P/FCFE, Sector | ||||||
| Food, Beverage & Tobacco | 16.95 | 29.54 | 16.45 | — | — | |
| P/FCFE, Industry | ||||||
| Consumer Staples | 25.33 | 24.84 | 18.28 | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 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).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,557,982,000 ÷ 204,035,956 = 7.64
4 Closing price as at the filing date of Hershey Co. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 240.69 ÷ 7.64 = 31.52
6 Click competitor name to see calculations.
- Share Price Trend
- The share price displayed a generally upward trajectory over the five-year period. Starting at $110.22 at the end of 2018, it increased significantly to $160.11 in 2019. Although there was a slight decrease to $151.29 in 2020, the price recovered and rose sharply to $202.59 in 2021 and further to $240.69 by the end of 2022. This indicates a strong growth trend in market valuation with minor fluctuations.
- FCFE per Share Trend
- Free Cash Flow to Equity (FCFE) per share exhibited more variability. It started at $10.58 in 2018, then decreased substantially to $6.01 in 2019. Subsequently, FCFE per share increased to $7.65 in 2020 and continued to rise to $9.83 in 2021. However, in 2022, it decreased again to $7.64, reflecting fluctuations in cash flow generation available to equity holders.
- P/FCFE Ratio Analysis
- The Price to FCFE ratio showed an increasing trend overall, indicating a rise in the market's valuation relative to the company's free cash flow. The ratio was 10.42 in 2018, nearly doubling to 26.63 in 2019. It then decreased slightly to 19.77 in 2020 before a modest increase to 20.62 in 2021. By 2022, the ratio reached its highest point at 31.52, suggesting that investors were willing to pay a much higher price per unit of free cash flow compared to previous years.
- Overall Observations
- The data reveals a strong increase in share price, despite fluctuations in FCFE per share. The rising P/FCFE ratio implies growing market optimism or expectations of future cash flow improvements, even as free cash flow per share showed volatility. The decoupling between price growth and FCFE changes suggests that factors other than current cash flows, such as anticipated growth or market sentiment, may be influencing valuation.