Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Kinder Morgan Inc., 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 financial performance between 2015 and 2019 is characterized by a significant divergence between steady operating cash inflows and highly volatile free cash flow to equity (FCFE).
- Operating Cash Flow Stability
- Net cash provided by operating activities remained relatively consistent over the five-year period, fluctuating within a range of US$ 4,601 million to US$ 5,303 million. Despite minor annual variations, the core ability to generate cash from operations demonstrated resilience, with a slight trough in 2017 followed by a peak in 2018.
- FCFE Volatility and Variability
- In contrast to operating cash flows, FCFE exhibited extreme instability. The metric shifted from positive values in 2015 and 2016 to a deficit of US$ 853 million in 2017. A sharp recovery occurred in 2018, reaching a peak of US$ 2,257 million, before returning to a negative position of US$ 720 million in 2019.
- Analysis of Cash Flow Divergence
- The lack of correlation between the stable operating cash flows and the erratic FCFE suggests that the swings in equity-available cash were driven by factors external to core operations, such as fluctuations in capital expenditures or net debt movements. The significant shifts indicate an inconsistent cycle of investment and financing activities relative to the steady operational baseline.
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Price to FCFE Ratio, Current
Kinder Morgan Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 2,261,487,090 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | (720) |
| FCFE per share | -0.32 |
| Current share price (P) | 15.71 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 18.73 |
| ConocoPhillips | 25.71 |
| ExxonMobil Holdings Corp. | 28.49 |
Based on: 10-K (reporting date: 2019-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Kinder Morgan Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 2,265,063,459 | 2,263,656,419 | 2,206,066,684 | 2,232,438,943 | 2,231,555,976 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | (720) | 2,257) | (853) | 455) | 583) | |
| FCFE per share3 | -0.32 | 1.00 | -0.39 | 0.20 | 0.26 | |
| Share price1, 4 | 21.81 | 18.02 | 17.24 | 22.48 | 15.62 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | 18.07 | — | 110.30 | 59.79 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| ExxonMobil Holdings 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
= -720,000,000 ÷ 2,265,063,459 = -0.32
4 Closing price as at the filing date of Kinder Morgan Inc. Annual Report.
5 2019 Calculation
P/FCFE = Share price ÷ FCFE per share
= 21.81 ÷ -0.32 = —
6 Click competitor name to see calculations.
An analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio reveals extreme volatility and inconsistency in valuation multiples over the period from 2015 to 2019. The instability of the ratio is primarily driven by fluctuations in the underlying Free Cash Flow to Equity per share, which transitioned between positive and negative values multiple times.
- Share Price Trends
- The share price exhibited a non-linear trajectory, rising from 15.62 USD in 2015 to a peak of 22.48 USD in 2016. Following a decline to 17.24 USD in 2017, a gradual recovery was observed, with the price ending the period at 21.81 USD in 2019.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share demonstrated significant instability. After a decline from 0.26 USD in 2015 to 0.20 USD in 2016, the figure turned negative in 2017 (-0.39 USD). A substantial recovery occurred in 2018, reaching a peak of 1.00 USD, before reverting to a negative value of -0.32 USD in 2019. This pattern suggests erratic cash flow generation or inconsistent capital expenditure requirements.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio experienced sharp fluctuations. Between 2015 and 2016, the ratio nearly doubled from 59.79 to 110.30, indicating that the share price increased while cash flow per share diminished. The ratio became non-meaningful in 2017 and 2019 due to negative FCFE. In 2018, the ratio contracted significantly to 18.07, the lowest point in the series, which was the direct result of the surge in FCFE per share to 1.00 USD.
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