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).
- Operating Activities Cash Flow
- The net cash provided by operating activities shows a generally increasing trend over the five-year period. Starting at $2,853 million in 2018, it rose to $3,024 million in 2019, followed by a minor decline to $2,658 million in 2020, likely reflecting impacts from external economic conditions. Subsequently, the cash flow from operations increased significantly to $3,689 million in 2021 and further to $4,433 million in 2022, indicating strengthening operational efficiency or improved business performance in recent years.
- Free Cash Flow to Equity (FCFE)
- The free cash flow to equity exhibited considerable volatility across the same timeframe. From a high of $3,461 million in 2018, it sharply decreased to $1,096 million in 2019 and further dropped to $392 million in 2020. This decline suggests increased capital expenditures, debt repayments, or reduced cash available for shareholders during these years. However, there was a notable recovery in 2021, with FCFE increasing to $1,383 million, and a substantial rebound in 2022, climbing to $3,352 million, approaching the initial levels observed in 2018. This pattern indicates improved cash generation after investments and financing activities, reflecting a positive shift in financial flexibility and shareholder returns in the most recent periods.
Price to FCFE Ratio, Current
United Rentals Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 69,359,591 |
| Selected Financial Data (US$) | |
| 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. | 29.75 |
| Eaton Corp. plc | 37.24 |
| GE Aerospace | 42.38 |
| Honeywell International Inc. | 9.15 |
| Lockheed Martin Corp. | 17.69 |
| RTX Corp. | 132.71 |
| P/FCFE, Sector | |
| Capital Goods | 48.53 |
| P/FCFE, Industry | |
| Industrials | 41.14 |
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 | 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 | — | — | — | |
| 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 financial data reveals significant fluctuations over the analyzed period, particularly in share price, free cash flow to equity (FCFE) per share, and the price-to-FCFE ratio (P/FCFE).
- Share Price
- The share price exhibited a steady increase throughout the five-year span, rising from $116.02 at the end of 2018 to $392.48 by the end of 2022. This represents a strong upward trend, more than tripling in value, with especially notable acceleration occurring after 2019.
- FCFE Per Share
- The FCFE per share experienced considerable volatility. Beginning at $43.48 in 2018, it sharply declined to $14.74 in 2019 and further dropped to a low of $5.43 in 2020. Following this trough, the metric recovered substantially to $19.10 in 2021 and then surged to $48.33 in 2022, surpassing the initial 2018 level.
- Price to FCFE Ratio (P/FCFE)
- The P/FCFE ratio showed significant variability reflecting the combined impact of share price movements and FCFE per share changes. Starting at a relatively low 2.67 in 2018, it sharply increased to 10.33 in 2019 and surged dramatically to 43.52 in 2020, indicating that the share price was very high relative to FCFE during this period. Subsequently, the ratio decreased to 16.12 in 2021 and further reduced to 8.12 in 2022, suggesting an adjustment towards a more moderate valuation relative to free cash flow generation.
Overall, the data suggests that while the market value of the entity's shares increased consistently, the generated free cash flow to equity was more erratic, particularly declining sharply around 2019-2020 before recovering strongly. The resulting valuation multiples reflect this pattern, with a significant pricing premium observed when FCFE was low, followed by a normalization as cash flow generation improved.