Price to FCFE (P/FCFE)
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Merck & Co. Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Free Cash Flow to Equity (FCFE)
Merck & Co. Inc., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
The financial data indicates significant variability in the cash flows generated by the company over the five-year period.
- Net Cash Provided by Operating Activities
- This metric shows a general upward trend but with notable fluctuations. Starting at 10,253 million US dollars in 2020, it rose substantially to 13,122 million in 2021 and then experienced a marked increase to 19,095 million in 2022. However, in 2023, operating cash flow declined sharply to 13,006 million before recovering strongly in 2024 to reach the highest value in the series at 21,468 million US dollars.
- Free Cash Flow to Equity (FCFE)
- FCFE exhibits a more stable but less consistent pattern compared to operating cash flow. It began at 10,580 million US dollars in 2020, slightly decreasing to 10,305 million in 2021. Thereafter, there was moderate growth to 12,456 million in 2022, followed by a continued increase to 13,327 million in 2023. The most significant rise occurs in 2024, where FCFE reaches 20,405 million, closely aligning with the peak operating cash flow figure for the same year.
Overall, the data suggests that while operating cash flow is somewhat volatile year-to-year, the company manages to convert a substantial portion of its cash flows into free cash available to equity holders. The sharp increases in 2022 and 2024 for operating cash flow are mirrored by significant growth in FCFE, indicating effective cash management and possibly improved operational performance or changes in working capital and capital expenditure policies in those years.
Price to FCFE Ratio, Current
Merck & Co. Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| AbbVie Inc. | |
| Amgen Inc. | |
| Bristol-Myers Squibb Co. | |
| Danaher Corp. | |
| Eli Lilly & Co. | |
| Gilead Sciences Inc. | |
| Johnson & Johnson | |
| Pfizer Inc. | |
| Regeneron Pharmaceuticals Inc. | |
| Thermo Fisher Scientific Inc. | |
| Vertex Pharmaceuticals Inc. | |
| P/FCFE, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | |
| P/FCFE, Industry | |
| Health Care | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Merck & Co. Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| P/FCFE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| P/FCFE, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Data adjusted for splits and stock dividends.
3 2024 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Merck & Co. Inc. Annual Report.
5 2024 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
- Share Price
- The share price exhibited an overall upward trend from 2020 through 2023, increasing from $74.62 to a peak of $128.84. However, in 2024, the share price declined significantly to $91.43, indicating a notable reduction after the previous years of growth.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share showed a general increase over the period. Starting at $4.18 in 2020, it slightly decreased to $4.08 in 2021 but then increased steadily each year, reaching $8.08 by 2024. The growth in FCFE per share suggests improving cash generation available to equity shareholders over time, with a particularly strong increase in the final year.
- Price to FCFE Ratio (P/FCFE)
- The price to FCFE ratio initially increased from 17.85 in 2020 to a high of 24.48 in 2023, indicating that the market increasingly valued the share price relative to the free cash flow per share. However, in 2024, this ratio dropped sharply to 11.32. This decline aligns with the reduction in share price and the increase in FCFE per share, reflecting a market revaluation making the shares relatively less expensive in terms of free cash flow.