Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Parker-Hannifin Corp., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
- Net cash provided by operating activities
- The net cash provided by operating activities exhibits an overall upward trend from June 30, 2017, through June 30, 2022. The figure increases from approximately 1,302,471 thousand US dollars in 2017 to a peak of around 2,575,001 thousand US dollars in 2021. A slight decline is observed in 2022, falling to approximately 2,441,730 thousand US dollars. Despite the decrease in the final year, the data indicates a strong and generally positive cash flow from core operations over the period, suggesting improving operational efficiency or growth in operational scale.
- Free cash flow to equity (FCFE)
- The free cash flow to equity presents a more volatile pattern compared to operating cash flow. The FCFE starts at approximately 3,577,255 thousand US dollars in 2017 but then sharply declines the following year to 495,176 thousand US dollars. It rises again significantly in 2019 to 3,753,994 thousand US dollars, followed by a decline to 2,982,477 thousand in 2020. In 2021, a notable decrease to 571,603 thousand is recorded, preceding a substantial surge to 7,252,384 thousand in 2022, the highest value in the period analyzed. This variability suggests fluctuations in capital expenditures, debt servicing, or dividend payments impacting funds available to equity holders, but the marked increase in 2022 indicates a significant improvement in the company's financial flexibility or cash generation ability toward shareholders.
- Summary of Trends
- Overall, the operational cash flows show steady improvement with minor recent decline, reflecting robust underlying business performance. Conversely, free cash flow to equity demonstrates considerable fluctuations, signaling varying degrees of investment, financing activities, or payout policies through the years. The exceptionally high FCFE in 2022 could point to optimized capital management or a favorable shift in financial strategy. Monitoring the drivers behind these FCFE swings is recommended to better understand the company's capacity to generate shareholder returns consistently.
Price to FCFE Ratio, Current
Parker-Hannifin Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 128,266,030 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 7,252,384) |
| FCFE per share | 56.54 |
| Current share price (P) | 349.02 |
| Valuation Ratio | |
| P/FCFE | 6.17 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 19.53 |
| Eaton Corp. plc | 40.71 |
| GE Aerospace | 69.45 |
| Honeywell International Inc. | 8.75 |
| Lockheed Martin Corp. | 12.15 |
| RTX Corp. | 103.40 |
| P/FCFE, Sector | |
| Capital Goods | 40.23 |
| P/FCFE, Industry | |
| Industrials | 34.99 |
Based on: 10-K (reporting date: 2022-06-30).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Parker-Hannifin Corp., historical P/FCFE calculation, comparison to benchmarks
| Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | Jun 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 128,402,997 | 129,101,437 | 128,561,616 | 128,441,799 | 132,360,024 | 133,129,936 | |
| Selected Financial Data (US$) | |||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 7,252,384) | 571,603) | 2,982,477) | 3,753,994) | 495,176) | 3,577,255) | |
| FCFE per share3 | 56.48 | 4.43 | 23.20 | 29.23 | 3.74 | 26.87 | |
| Share price1, 4 | 285.40 | 303.51 | 209.78 | 158.03 | 171.53 | 157.30 | |
| Valuation Ratio | |||||||
| P/FCFE5 | 5.05 | 68.55 | 9.04 | 5.41 | 45.85 | 5.85 | |
| Benchmarks | |||||||
| P/FCFE, Competitors6 | |||||||
| Boeing Co. | 120.43 | — | 6.78 | — | — | — | |
| Caterpillar Inc. | 24.03 | 16.36 | 25.22 | — | — | — | |
| Eaton Corp. plc | 28.68 | 24.43 | 25.59 | — | — | — | |
| GE Aerospace | 44.45 | — | — | — | — | — | |
| Honeywell International Inc. | 27.59 | 46.23 | 12.59 | — | — | — | |
| Lockheed Martin Corp. | 11.63 | 14.65 | 15.57 | — | — | — | |
| RTX Corp. | 26.71 | 35.07 | — | — | — | — | |
| P/FCFE, Sector | |||||||
| Capital Goods | 25.94 | — | 74.91 | — | — | — | |
| P/FCFE, Industry | |||||||
| Industrials | 25.07 | — | 40.69 | — | — | — | |
Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 7,252,384,000 ÷ 128,402,997 = 56.48
4 Closing price as at the filing date of Parker-Hannifin Corp. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 285.40 ÷ 56.48 = 5.05
6 Click competitor name to see calculations.
- Share Price
- The share price showed a fluctuating trend over the analyzed period. It increased from $157.30 in mid-2017 to a peak of $303.51 by mid-2021, demonstrating significant appreciation. However, in the final year observed, the share price declined to $285.40, indicating a correction from the previous high.
- Free Cash Flow to Equity (FCFE) per Share
- FCFE per share exhibited high volatility throughout the years. It started strongly at $26.87 in 2017, dropped sharply to $3.74 in 2018, and rose again to $29.23 by 2019. After a slight decrease to $23.20 in 2020, it plunged to $4.43 in 2021 but then surged to $56.48 in 2022. This pattern points to significant fluctuations in the company's ability to generate free cash flow for equity holders.
- Price to FCFE (P/FCFE) Ratio
- The P/FCFE ratio reflected notable instability as well. It was relatively low at 5.85 in 2017, escalated sharply to 45.85 in 2018, and fell again to 5.41 in 2019. Subsequently, it increased to 9.04 in 2020 and spiked dramatically to 68.55 in 2021 before declining steeply to 5.05 in 2022. This wide variation suggests fluctuating investor sentiment or market valuation relative to the company’s free cash flow generation.
- Overall Observations
- The data indicate a lack of consistent correlation between share price and FCFE per share. For example, despite a low FCFE in 2021, the share price reached its highest level, paralleled by an unusually high P/FCFE ratio, implying elevated market expectations or potential overvaluation during that period. Conversely, in 2022, an exceptional increase in FCFE was accompanied by a share price decline and a return to a lower P/FCFE ratio, suggesting a recalibration of valuation or market response to the company’s financial performance.