Name: Humana Inc. (NYSE:HUM) | Price to FCFE (P/FCFE)
Creator: Stock Analysis on Net

Free Cash Flow to Equity (FCFE)
P to FCFE Ratio, Current
P to FCFE Ratio, Historical

Humana Inc., FCFE calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income attributable to Humana	2,489)	2,806)	2,933)	3,367)	2,707)
Net (income) loss attributable to noncontrolling interests	(5)	(4)	1)	—)	—)
Net noncash charges	1,416)	1,251)	(116)	129)	914)
Changes in operating assets and liabilities, net of effect of businesses acquired and dispositions	81)	534)	(556)	2,143)	1,663)
Net cash provided by operating activities	3,981)	4,587)	2,262)	5,639)	5,284)
Purchases of property and equipment	(1,004)	(1,137)	(1,342)	(964)	(736)
Proceeds from sale of property and equipment	210)	17)	26)	—)	—)
Proceeds from issuance of senior notes, net	2,544)	1,982)	2,984)	1,088)	987)
Repayment of senior notes	(1,832)	(1,000)	—)	(400)	(400)
Proceeds from issuance (repayments) of commercial paper, net	211)	(376)	352)	295)	(360)
Proceeds from short-term borrowings	100)	—)	—)	—)	—)
Repayment of short-term borrowings	(100)	—)	—)	—)	—)
Proceeds from term loan	—)	—)	2,500)	1,000)	—)
Repayment of term loan	(500)	(2,000)	(2,078)	(1,000)	(650)
Debt issue costs	(7)	(6)	(31)	—)	—)
Change in book overdraft	55)	(28)	6)	95)	54)
Free cash flow to equity (FCFE)	3,658)	2,039)	4,679)	5,753)	4,179)

Based on: 10-K (reporting date: 2023-12-31), 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).

Analysis of cash flow metrics from 2019 to 2023 reveals a period of significant volatility in both operational liquidity and equity-available cash flows. While positive figures were maintained throughout the five-year period, the trajectories of operating cash flow and free cash flow to equity (FCFE) do not move in perfect synchronization, indicating varying impacts from capital expenditures and financing activities.

Net Cash Provided by Operating Activities: Operating cash flow peaked in 2020 at US$ 5,639 million before experiencing a sharp contraction in 2021, falling to a period low of US$ 2,262 million. A substantial recovery was observed in 2022, with figures rising to US$ 4,587 million, followed by a moderate decline to US$ 3,981 million in 2023.
Free Cash Flow to Equity (FCFE) Trends: FCFE followed an initial growth pattern, reaching a maximum of US$ 5,753 million in 2020. However, the most significant decline occurred in 2022, when FCFE dropped to US$ 2,039 million. By 2023, a recovery trend emerged, with FCFE increasing to US$ 3,658 million.
Divergence Between Operating Cash and FCFE: A notable divergence is observed during the 2020 and 2021 fiscal years. In 2021, FCFE (US$ 4,679 million) significantly exceeded net cash provided by operating activities (US$ 2,262 million), suggesting the influence of substantial non-operating cash inflows, such as net debt issuance or asset sales. This trend reversed sharply in 2022, where operating cash flow was more than double the FCFE, indicating a period of heavy capital investment or aggressive debt repayment.

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Humana Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	120,411,343
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	3,658)
FCFE per share	30.38
Current share price (P)	266.32
Valuation Ratio
P/FCFE	8.77
Benchmarks
P/FCFE, Competitors¹
Abbott Laboratories	34.57
Elevance Health Inc.	24.67
Intuitive Surgical Inc.	67.10
Medtronic PLC	31.58
UnitedHealth Group Inc.	21.83
P/FCFE, Sector
Health Care Equipment & Services	21.53
P/FCFE, Industry
Health Care	24.97

Based on: 10-K (reporting date: 2023-12-31).

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.

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Humana Inc., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
No. shares of common stock outstanding¹	120,653,315	124,974,862	126,633,599	128,861,929	132,106,497
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	3,658)	2,039)	4,679)	5,753)	4,179)
FCFE per share³	30.32	16.32	36.95	44.64	31.63
Share price^1, 4	363.98	505.69	424.71	378.33	370.99
Valuation Ratio
P/FCFE⁵	12.01	30.99	11.49	8.47	11.73
Benchmarks
P/FCFE, Competitors⁶
Abbott Laboratories	76.56	26.11	24.52	—	—
Elevance Health Inc.	16.04	14.26	11.07	—	—
Intuitive Surgical Inc.	177.77	89.67	58.39	—	—
Medtronic PLC	29.20	19.71	38.91	—	—
UnitedHealth Group Inc.	15.33	12.57	20.11	—	—
P/FCFE, Sector
Health Care Equipment & Services	22.95	16.47	22.14	—	—
P/FCFE, Industry
Health Care	18.20	18.50	17.94	—	—

Based on: 10-K (reporting date: 2023-12-31), 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).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,658,000,000 ÷ 120,653,315 = 30.32

⁴ Closing price as at the filing date of Humana Inc. Annual Report.

⁵ 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 363.98 ÷ 30.32 = 12.01

⁶ Click competitor name to see calculations.

The analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio from 2019 to 2023 reveals a period of relative valuation stability interrupted by a significant anomaly in 2022. The relationship between the market valuation and cash flow generation exhibits notable volatility, primarily driven by a divergence between share price movements and equity cash flow performance.

Share Price Trajectory: A consistent upward trend was observed from 2019 through 2022, with the share price rising from 370.99 US$ to a peak of 505.69 US$. This growth was followed by a sharp correction in 2023, where the price declined to 363.98 US$, returning to levels slightly below those seen at the start of the analyzed period.
FCFE per Share Performance: Free Cash Flow to Equity per share reached a peak of 44.64 US$ in 2020 but subsequently entered a downward trend, hitting a low of 16.32 US$ in 2022. A recovery occurred in 2023, with FCFE per share increasing to 30.32 US$, indicating a restoration of cash generation capabilities.
P/FCFE Ratio Dynamics: Between 2019 and 2021, the P/FCFE ratio remained relatively stable, fluctuating between 8.47 and 11.73. A drastic spike occurred in 2022, with the ratio ascending to 30.99. This surge was the result of a mathematical convergence where the share price reached its maximum value while FCFE per share reached its minimum, suggesting a period of significant overvaluation relative to cash flow.
Valuation Normalization: The P/FCFE ratio returned to historical norms in 2023, settling at 12.01. This normalization was driven by two simultaneous factors: a substantial reduction in the share price and a recovery in FCFE per share, which effectively realigned the equity price with the underlying cash flow performance.

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Humana Inc. (NYSE:HUM)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical