Price to FCFE (P/FCFE)
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Northrop Grumman Corp. pages available for free this week:
- Income Statement
- Common-Size Balance Sheet: Assets
- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
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Free Cash Flow to Equity (FCFE)
Northrop Grumman Corp., FCFE calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
The financial data presents the cash flow trends of the company over a five-year period from the end of 2018 to the end of 2022. The two key metrics shown are net cash provided by operating activities and free cash flow to equity (FCFE), both expressed in millions of US dollars.
- Net Cash Provided by Operating Activities
- This metric shows a positive inflow across all years, indicating that the company consistently generated cash from its core business operations. Starting at 3,827 million US dollars in 2018, the operating cash flow increased to 4,297 million in 2019 and remained relatively stable at 4,305 million in 2020. However, there is a noticeable decline starting in 2021 when it dropped to 3,567 million and further decreased to 2,901 million by the end of 2022. This downward trend in the last two years could indicate challenges in the company's operational efficiency or market conditions affecting cash generation.
- Free Cash Flow to Equity (FCFE)
- The FCFE figures show greater volatility compared to operating cash flow. Beginning at a relatively low value of 180 million in 2018, FCFE experienced a significant increase to 2,304 million in 2019 and further rose to 4,019 million in 2020. This indicates a period where the company likely had strong free cash available to equity shareholders, possibly due to improved operational performance or capital expenditure management. However, in 2021, FCFE turned negative at -84 million, suggesting that cash outflows exceeded inflows for equity holders that year, which could be related to high capital expenditures, debt repayments, or other financing activities. In 2022, the FCFE recovered to a positive 1,466 million but remained well below the peaks seen in 2019 and 2020.
Overall, these trends indicate that while the company maintained positive operating cash flows throughout the period, there was a notable decline in operational cash generation in the last two reported years. The free cash available to equity holders was strong during 2019 and 2020 but showed significant instability with a sharp downturn in 2021 and partial recovery in 2022. The data suggests a period of financial strength followed by challenges that affected the company’s cash flow dynamics, potentially requiring close attention to operational and capital management strategies going forward.
Price to FCFE Ratio, Current
Northrop Grumman Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | |
| FCFE per share | |
| Current share price (P) | |
| Valuation Ratio | |
| P/FCFE | |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | |
| Caterpillar Inc. | |
| Eaton Corp. plc | |
| GE Aerospace | |
| Honeywell International Inc. | |
| Lockheed Martin Corp. | |
| RTX Corp. | |
| P/FCFE, Sector | |
| Capital Goods | |
| P/FCFE, Industry | |
| Industrials | |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Northrop Grumman Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | ||||||
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | ||||||
| FCFE per share3 | ||||||
| Share price1, 4 | ||||||
| Valuation Ratio | ||||||
| P/FCFE5 | ||||||
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| P/FCFE, Sector | ||||||
| Capital Goods | ||||||
| P/FCFE, Industry | ||||||
| Industrials | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =
4 Closing price as at the filing date of Northrop Grumman Corp. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =
6 Click competitor name to see calculations.
The financial data displays notable fluctuations in the share price and free cash flow to equity (FCFE) per share over the five-year period ending December 31, 2022. These changes have influenced the corresponding price-to-free cash flow to equity (P/FCFE) ratios, where data is available.
- Share Price Trends
- The share price experienced an overall upward trend from 2018 through 2022, starting at $275.55 and increasing to $443.47. Notably, there was a significant increase from 2018 to 2019, followed by a decrease in 2020. The price then rebounded in 2021 and continued to rise in 2022, reaching the highest point in the observed period.
- Free Cash Flow to Equity (FCFE) per Share
- The FCFE per share showed considerable volatility. It increased sharply from a modest $1.06 in 2018 to $24.11 in 2020. However, in 2021, there was a marked reversal to a negative FCFE of -$0.54, indicating potential cash flow challenges or increased capital expenditure in that year. By 2022, the FCFE recovered to $9.58, though still below the 2020 peak.
- Price-to-FCFE Ratio
- The P/FCFE ratio reflected the above dynamics, being extremely elevated at 259.84 in 2018, suggesting that the market price was very high relative to FCFE per share at that time. It then decreased sharply to 12.16 by 2020, in line with the surge in FCFE. There is no calculation available for 2021 due to the negative FCFE. In 2022, the ratio increased to 46.3, indicative of a higher market valuation relative to cash flow after the dip in FCFE.
In summary, the company exhibited strong share price growth with accompanying fluctuations in cash flow generation capacity. The large volatility in FCFE suggests variations in operational cash generation or fiscal management across these years. The market’s valuation relative to cash flow, as represented by the P/FCFE ratio, decreased significantly as FCFE improved, but rose again when FCFE declined and became negative, hinting at changing investor perceptions of the company's financial health and growth prospects.