Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
United Rentals Inc., 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 analysis of cash flow dynamics reveals a period of significant volatility in equity-available cash, contrasted by a relatively steady growth in core operating cash generation between 2018 and 2022.
- Operating Cash Flow Trends
- Net cash provided by operating activities exhibited a general upward trajectory over the five-year period. While a marginal decrease occurred in 2020, the metric accelerated in subsequent years, reaching a peak of US$ 4,433 million in 2022. This represents a cumulative increase of approximately 55% from the 2018 baseline of US$ 2,853 million.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE experienced a severe contraction between 2018 and 2020, falling from US$ 3,461 million to a low of US$ 392 million. This downward trend was reversed starting in 2021, with a robust recovery leading to US$ 3,352 million by the end of 2022, nearly returning to the levels observed at the start of the period.
- Comparative Analysis of OCF and FCFE
- A notable divergence between operating cash flows and FCFE is observed from 2019 through 2021. During these years, FCFE remained substantially lower than operating cash flows, indicating a period of intensified capital expenditures or significant debt repayments. In contrast, the 2018 fiscal year showed FCFE exceeding operating cash flows, which suggests a net inflow of financing or asset divestitures during that period.
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Price to FCFE Ratio, Current
United Rentals Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 69,359,591 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 3,352) |
| FCFE per share | 48.33 |
| Current share price (P) | 392.48 |
| Valuation Ratio | |
| P/FCFE | 8.12 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Boeing Co. | — |
| Caterpillar Inc. | 22.11 |
| Eaton Corp. plc | 34.51 |
| GE Aerospace | 44.84 |
| Honeywell International Inc. | 9.38 |
| Lockheed Martin Corp. | 16.66 |
| RTX Corp. | 59.36 |
| P/FCFE, Sector | |
| Capital Goods | 43.97 |
| P/FCFE, Industry | |
| Industrials | 38.94 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
United Rentals Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 69,359,591 | 72,421,902 | 72,199,276 | 74,375,477 | 79,591,082 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 3,352) | 1,383) | 392) | 1,096) | 3,461) | |
| FCFE per share3 | 48.33 | 19.10 | 5.43 | 14.74 | 43.48 | |
| Share price1, 4 | 392.48 | 307.76 | 236.27 | 152.26 | 116.02 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 8.12 | 16.12 | 43.52 | 10.33 | 2.67 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Boeing Co. | 120.43 | — | — | — | — | |
| Caterpillar Inc. | 24.03 | 16.36 | — | — | — | |
| Eaton Corp. plc | 28.68 | 24.43 | — | — | — | |
| GE Aerospace | 44.45 | — | — | — | — | |
| Honeywell International Inc. | 27.59 | 46.23 | — | — | — | |
| Lockheed Martin Corp. | 11.63 | 14.65 | — | — | — | |
| RTX Corp. | 26.71 | 35.07 | — | — | — | |
| P/FCFE, Sector | ||||||
| Capital Goods | 25.94 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Industrials | 25.07 | — | — | — | — | |
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
= 3,352,000,000 ÷ 69,359,591 = 48.33
4 Closing price as at the filing date of United Rentals Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 392.48 ÷ 48.33 = 8.12
6 Click competitor name to see calculations.
The period between 2018 and 2022 is characterized by a consistent appreciation in share price contrasted by significant volatility in Free Cash Flow to Equity (FCFE) per share, leading to substantial fluctuations in the P/FCFE valuation multiple.
- Share Price Trajectory
- A sustained upward trend is observed, with the share price increasing from 116.02 US$ in 2018 to 392.48 US$ by the end of 2022. This represents a continuous growth pattern over the five-year period.
- FCFE per Share Performance
- FCFE per share exhibited a sharp decline between 2018 and 2020, falling from 43.48 US$ to a minimum of 5.43 US$. Following this trough, a strong recovery occurred, with values rising to 19.10 US$ in 2021 and reaching 48.33 US$ in 2022, surpassing the initial 2018 levels.
- P/FCFE Ratio Dynamics
- The P/FCFE ratio experienced extreme volatility, peaking at 43.52 in 2020. This spike was primarily driven by the contraction in FCFE per share rather than a corresponding surge in share price. From 2021 onward, the ratio declined sharply to 16.12 and further to 8.12 in 2022, indicating a normalization of the valuation as cash flow generation regained strength relative to the market price.
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