Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Marathon Oil Corp., FCFE calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2017-12-31).
The financial performance between 2017 and 2021 is characterized by significant volatility in cash generation and a strong correlation between operating activities and equity-available cash flows, with a notable recovery occurring in the final year of the period.
- Operating Cash Flow Trends
- Net cash provided by operating activities exhibited a fluctuating trajectory, reaching peaks of approximately US$ 3.2 billion in both 2018 and 2021. A significant contraction was observed in 2020, where operating cash flow fell to US$ 1,473 million, marking the lowest point in the five-year sequence before rebounding sharply in 2021.
- Free Cash Flow to Equity (FCFE) Analysis
- FCFE demonstrated higher volatility than operating cash flow. The period opened with a substantial deficit of US$ 1,808 million in 2017, followed by a turnaround to positive territory in 2018. A downward trend ensued through 2020, where FCFE reached a near-breakeven point of US$ 3 million, before recovering to US$ 676 million by the end of 2021.
- Cash Flow Divergence and Capital Allocation
- A persistent gap exists between net cash from operating activities and FCFE, indicating significant outflows toward capital expenditures or debt obligations. This divergence was most extreme in 2017, where positive operating cash flow of US$ 1,988 million was offset by heavy investments or repayments, resulting in a deeply negative FCFE. While the gap narrowed in 2020, the overall capacity to generate cash for equity holders remained limited until the recovery observed in 2021.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Price to FCFE Ratio, Current
Marathon Oil Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 677,583,502 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 676) |
| FCFE per share | 1.00 |
| Current share price (P) | 21.47 |
| Valuation Ratio | |
| P/FCFE | 21.52 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 18.22 |
| ConocoPhillips | 24.11 |
| Exxon Mobil Corp. | 28.46 |
| P/FCFE, Sector | |
| Oil, Gas & Consumable Fuels | 34.55 |
| P/FCFE, Industry | |
| Energy | 35.72 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Marathon Oil Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 730,765,163 | 789,075,988 | 795,849,999 | 818,504,459 | 849,755,866 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 676) | 3) | 197) | 481) | (1,808) | |
| FCFE per share3 | 0.93 | 0.00 | 0.25 | 0.59 | -2.13 | |
| Share price1, 4 | 21.89 | 11.16 | 10.25 | 16.68 | 15.18 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 23.66 | 2,935.36 | 41.41 | 28.38 | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | 32.05 | — | — | — | — | |
| ConocoPhillips | 10.61 | — | — | — | — | |
| Exxon Mobil Corp. | 19.82 | — | — | — | — | |
| P/FCFE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 19.75 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Energy | 20.81 | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 676,000,000 ÷ 730,765,163 = 0.93
4 Closing price as at the filing date of Marathon Oil Corp. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 21.89 ÷ 0.93 = 23.66
6 Click competitor name to see calculations.
The financial performance between 2017 and 2021 is characterized by significant volatility in both equity valuation and cash flow generation. A notable transition occurred from negative free cash flow to equity (FCFE) in 2017 to a period of recovery and eventual stabilization by 2021, mirroring fluctuations in the share price.
- Share Price Trends
- The share price exhibited a fluctuating trajectory, starting at 15.18 US$ in 2017 and peaking at 21.89 US$ in 2021. A significant decline was observed in 2019, where the price dropped to 10.25 US$, followed by a gradual recovery in 2020 and a sharp increase in 2021.
- FCFE per Share Evolution
- Cash flow generation experienced extreme variance. In 2017, FCFE per share was negative at -2.13 US$, rendering the P/FCFE ratio inapplicable. Positive values were recorded in 2018 (0.59 US$) and 2019 (0.25 US$), before falling to 0.00 US$ in 2020. A strong recovery occurred in 2021, with FCFE per share reaching its five-year peak of 0.93 US$.
- P/FCFE Ratio Analysis
- The P/FCFE ratio reflects the instability of the underlying cash flows. After shifting to positive territory in 2018 at 28.38, the ratio rose to 41.41 in 2019, indicating a contraction in FCFE relative to the share price. In 2020, the ratio reached an anomalous peak of 2,935.36, a result of the FCFE per share approaching zero. By 2021, the ratio normalized to 23.66, the lowest positive valuation multiple in the period, driven by the simultaneous increase in both share price and FCFE generation.
Overall, the data indicates a period of financial distress and recovery. The extreme spike in the P/FCFE ratio in 2020 serves as a mathematical outlier highlighting the absence of free cash flow, while the 2021 figures suggest a return to fundamental stability and improved valuation efficiency.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?