Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
ONEOK Inc., FCFE calculation
US$ in thousands
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).
An analysis of the cash flow trajectory from 2018 to 2022 reveals a period of operational volatility followed by a strong recovery in both operating cash flows and equity-available cash. The company demonstrated a capacity to significantly expand its free cash flow to equity relative to its operational baseline over the five-year period.
- Operating Cash Flow Trends
- Cash provided by operating activities experienced a moderate decline between 2018 and 2020, decreasing from 2,186,719 thousand US$ to a low of 1,899,068 thousand US$. However, a sharp reversal occurred in 2021, with cash flow increasing to 2,546,272 thousand US$, and continuing upward to peak at 2,905,955 thousand US$ by December 31, 2022. This represents an overall growth of approximately 33% from the 2018 baseline.
- Free Cash Flow to Equity (FCFE) Dynamics
- The FCFE exhibited a substantial increase between 2018 and 2019, rising from 293,694 thousand US$ to 1,446,517 thousand US$. Following this spike, FCFE remained relatively stable with slight contractions in 2020 and 2021, holding at 1,271,242 thousand US$ and 1,244,524 thousand US$ respectively. A renewed upward trend was observed in 2022, where FCFE reached its period high of 1,677,477 thousand US$.
- FCFE Conversion and Capital Allocation
- A significant shift in the relationship between operating cash and FCFE is observable. In 2018, FCFE represented only a small fraction of operating cash flow, suggesting high capital expenditures or debt repayments during that year. By 2019, the conversion rate increased dramatically, indicating a potential shift toward lower capital intensity or a change in the financing structure. While the ratio of FCFE to operating cash fluctuated between 2020 and 2021, the 2022 results indicate a strengthened position in generating cash available to shareholders.
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Price to FCFE Ratio, Current
ONEOK Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 447,674,825 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,677,477) |
| FCFE per share | 3.75 |
| Current share price (P) | 64.15 |
| Valuation Ratio | |
| P/FCFE | 17.12 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Chevron Corp. | 18.18 |
| ConocoPhillips | 24.06 |
| Exxon Mobil Corp. | 28.50 |
| P/FCFE, Sector | |
| Oil, Gas & Consumable Fuels | 12.99 |
| P/FCFE, Industry | |
| Energy | 13.78 |
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
ONEOK Inc., 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 | 447,220,972 | 446,213,285 | 444,983,595 | 413,319,000 | 411,611,382 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,677,477) | 1,244,524) | 1,271,242) | 1,446,517) | 293,694) | |
| FCFE per share3 | 3.75 | 2.79 | 2.86 | 3.50 | 0.71 | |
| Share price1, 4 | 65.45 | 63.82 | 45.62 | 73.61 | 64.29 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 17.45 | 22.88 | 15.97 | 21.03 | 90.10 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Chevron Corp. | 10.59 | 32.05 | — | — | — | |
| ConocoPhillips | 8.93 | 10.61 | — | — | — | |
| Exxon Mobil Corp. | 8.73 | 19.82 | — | — | — | |
| P/FCFE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.33 | 19.75 | — | — | — | |
| P/FCFE, Industry | ||||||
| Energy | 10.19 | 20.81 | — | — | — | |
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
= 1,677,477,000 ÷ 447,220,972 = 3.75
4 Closing price as at the filing date of ONEOK Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 65.45 ÷ 3.75 = 17.45
6 Click competitor name to see calculations.
Analysis of the Price to Free Cash Flow to Equity (P/FCFE) ratio indicates a period of extreme valuation adjustment followed by relative stabilization between 2018 and 2022. The most pronounced shift occurred between 2018 and 2019, characterized by a sharp decline in the P/FCFE ratio from 90.10 to 21.03, driven primarily by a substantial increase in cash flow generation.
- Valuation Normalization
- The P/FCFE ratio exhibited an outlier peak of 90.10 in 2018, which subsequently normalized to a range between 15.97 and 22.88 over the following four years. This normalization suggests a transition from a period of low free cash flow relative to market price to a more sustainable valuation based on equity cash flow yields.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE per share demonstrated significant growth, rising from 0.71 USD in 2018 to a peak of 3.75 USD in 2022. The most aggressive expansion occurred between 2018 and 2019, where FCFE per share increased nearly fivefold, effectively lowering the P/FCFE ratio despite a simultaneous increase in the share price.
- Market Price Correlation and Volatility
- The share price experienced a notable contraction in 2020, falling to 45.62 USD. This price decline, coupled with a slight reduction in FCFE per share to 2.86 USD, resulted in the lowest P/FCFE ratio of the period at 15.97. Subsequent recovery in the share price to 65.45 USD by 2022, paired with an increase in FCFE to 3.75 USD, suggests a stabilized relationship between market valuation and cash flow capacity.
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