Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Hubbell Inc., 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).
The financial profile exhibits a contrast between relatively stable operational cash generation and highly volatile free cash flow to equity (FCFE) over the five-year period ending December 31, 2022.
- Operating Cash Flow Trends
- Net cash provided by operating activities shows a general pattern of resilience. From 2018 to 2020, an upward trajectory was observed, moving from $517.1 million to a peak of $648.0 million. Despite a contraction in 2021 to $513.7 million, the metric recovered to $636.2 million by 2022, indicating a consistent ability to generate cash from core business operations.
- Free Cash Flow to Equity (FCFE) Performance
- FCFE demonstrates significant fluctuation, lacking the stability seen in operating cash flows. A notable peak of $1.15 billion was recorded in 2018, followed by a sharp decline to $272.6 million in 2019. The value subsequently oscillated, rising to $575.2 million in 2020, dropping again to $274.2 million in 2021, and recovering to $502.1 million in 2022.
- Comparative Analysis of Cash Flow Metrics
- A divergence is observed between operating cash and FCFE. In 2018, FCFE substantially exceeded operating cash flows, which suggests a significant influx of cash likely stemming from financing activities or asset divestitures. Conversely, from 2019 through 2022, FCFE remained consistently lower than net cash provided by operating activities, implying that capital expenditures and debt repayments absorbed a significant portion of the operational cash generated.
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Price to FCFE Ratio, Current
Hubbell Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 53,622,050 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 502,100) |
| FCFE per share | 9.36 |
| Current share price (P) | 279.10 |
| Valuation Ratio | |
| P/FCFE | 29.81 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 20.71 |
| Eaton Corp. plc | 31.96 |
| GE Aerospace | 42.84 |
| Honeywell International Inc. | 8.86 |
| Lockheed Martin Corp. | 16.13 |
| RTX Corp. | 57.40 |
| P/FCFE, Sector | |
| Capital Goods | 41.93 |
| P/FCFE, Industry | |
| Industrials | 37.32 |
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
Hubbell Inc., 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 | 53,600,592 | 54,409,067 | 54,296,993 | 54,434,310 | 54,601,694 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 502,100) | 274,200) | 575,200) | 272,600) | 1,154,800) | |
| FCFE per share3 | 9.37 | 5.04 | 10.59 | 5.01 | 21.15 | |
| Share price1, 4 | 240.62 | 183.31 | 164.36 | 147.54 | 118.61 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 25.69 | 36.37 | 15.52 | 29.46 | 5.61 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Boeing Co. | 120.43 | — | — | — | — | |
| Caterpillar Inc. | 24.03 | 16.36 | — | — | — | |
| Eaton Corp. plc | 28.68 | 24.43 | — | — | — | |
| GE Aerospace | 44.45 | — | — | — | — | |
| Honeywell International Inc. | 27.59 | 46.23 | — | — | — | |
| Lockheed Martin Corp. | 11.63 | 14.65 | — | — | — | |
| RTX Corp. | 26.71 | 35.07 | — | — | — | |
| P/FCFE, Sector | ||||||
| Capital Goods | 25.94 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Industrials | 25.07 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 502,100,000 ÷ 53,600,592 = 9.37
4 Closing price as at the filing date of Hubbell Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 240.62 ÷ 9.37 = 25.69
6 Click competitor name to see calculations.
The analysis reveals a divergence between the consistent growth of the share price and the high volatility of Free Cash Flow to Equity (FCFE) per share from 2018 to 2022. While the market valuation increased steadily, the underlying cash flow available to shareholders fluctuated significantly, leading to substantial instability in the P/FCFE ratio.
- Share Price Performance
- A steady upward trajectory is observed in the share price, which climbed from 118.61 US$ in 2018 to 240.62 US$ by 2022. This indicates a continuous expansion in market valuation throughout the analyzed period.
- FCFE per Share Volatility
- FCFE per share exhibited extreme variance, starting at a high of 21.15 US$ in 2018 before dropping sharply to 5.01 US$ in 2019. The subsequent years maintained this volatility, with a recovery to 10.59 US$ in 2020, a secondary decline to 5.04 US$ in 2021, and a recovery to 9.37 US$ in 2022.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio fluctuated aggressively in response to the instability of cash flows. The ratio moved from a valuation low of 5.61 in 2018 to a peak of 36.37 in 2021. These spikes correlate directly with periods of diminished FCFE per share, suggesting that the share price continued to rise despite significant contractions in the cash flow available to equity holders.
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