Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Monsanto Co., FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
The financial performance between 2012 and 2017 reveals a distinct divergence between core operating cash generation and the cash flow available to equity holders.
- Operating Cash Flow Stability
- Net cash provided by operating activities remained relatively consistent throughout the period, fluctuating within a range of US$ 2,588 million to US$ 3,226 million. Despite minor year-over-year variances, the operating capacity of the business demonstrated resilience, reaching its highest point in 2017.
- Free Cash Flow to Equity Volatility
- Free cash flow to equity (FCFE) exhibited significant volatility, most notably in 2014 when it surged to US$ 7,493 million. This figure represents a substantial deviation from the operating cash flow of US$ 3,054 million for the same year, suggesting non-operational inflows such as asset divestitures or significant new debt financing.
- Divergence and Long-term FCFE Decline
- Following the 2014 peak, a sustained downward trend in FCFE is observed. By 2017, FCFE decreased to US$ 889 million, even as operating cash flow reached its period peak of US$ 3,226 million. This widening gap indicates that a larger portion of operating cash was directed toward capital expenditures or debt repayments in the latter years of the period.
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Price to FCFE Ratio, Current
Monsanto Co., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 441,283,987 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 889) |
| FCFE per share | 2.01 |
| Current share price (P) | 118.05 |
| Valuation Ratio | |
| P/FCFE | 58.60 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| lululemon athletica inc. | 13.46 |
| Nike Inc. | 27.54 |
Based on: 10-K (reporting date: 2017-08-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Monsanto Co., historical P/FCFE calculation, comparison to benchmarks
| Aug 31, 2017 | Aug 31, 2016 | Aug 31, 2015 | Aug 31, 2014 | Aug 31, 2013 | Aug 31, 2012 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 440,199,969 | 437,982,595 | 439,837,164 | 484,073,332 | 525,837,818 | 534,598,091 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in millions)2 | 889) | 1,821) | 3,367) | 7,493) | 2,126) | 2,142) | |
| FCFE per share3 | 2.02 | 4.16 | 7.66 | 15.48 | 4.04 | 4.01 | |
| Share price1, 4 | 121.52 | 102.49 | 93.73 | 112.18 | 107.62 | 88.69 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 60.17 | 24.65 | 12.24 | 7.25 | 26.62 | 22.14 | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| lululemon athletica inc. | — | — | — | — | — | — | |
| Nike Inc. | — | — | — | — | — | — | |
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
1 Data adjusted for splits and stock dividends.
3 2017 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 889,000,000 ÷ 440,199,969 = 2.02
4 Closing price as at the filing date of Monsanto Co. Annual Report.
5 2017 Calculation
P/FCFE = Share price ÷ FCFE per share
= 121.52 ÷ 2.02 = 60.17
6 Click competitor name to see calculations.
The analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio reveals a period of significant volatility in valuation metrics between 2012 and 2017. While the share price maintained a general upward trajectory over the analyzed period, the FCFE per share experienced substantial fluctuations, resulting in a dramatic expansion of the valuation multiple by the final period.
- Share Price Performance
- The share price demonstrated an overall growth trend, increasing from 88.69 US$ in 2012 to 121.52 US$ in 2017. A temporary decline was noted in 2015, when the price fell to 93.73 US$, before recovering steadily over the subsequent two years.
- Free Cash Flow to Equity (FCFE) per Share Trends
- FCFE per share exhibited extreme variability, peaking in 2014 at 15.48 US$. This represented a sharp increase from the 4.01 US$ to 4.04 US$ range seen in 2012 and 2013. Following the 2014 peak, a sustained downward trend occurred, with values falling to 7.66 US$ in 2015, 4.16 US$ in 2016, and reaching a period low of 2.02 US$ in 2017.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio moved in inverse correlation with the FCFE per share. The ratio reached its minimum of 7.25 in 2014, reflecting the high cash flow available relative to the share price. Subsequently, the ratio expanded rapidly as FCFE per share declined and the share price rose. This culminated in a significant spike to 60.17 in 2017, indicating a substantial divergence between the market valuation and the company's cash flow generation capabilities for equity holders.
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