Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
United States Steel 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 reveals significant volatility in both operating cash flows and free cash flow to equity (FCFE) over the five-year period ending December 31, 2022. While operating cash flows demonstrated a dramatic recovery following a low point in 2020, FCFE exhibited an inconsistent trajectory, fluctuating between negative and positive values regardless of the operating cash strength.
- Net Cash Provided by Operating Activities
- A downward trend was observed from 2018 to 2020, with cash flows decreasing from US$ 938 million to a period low of US$ 138 million. This decline was followed by a substantial surge in 2021, where operating cash increased to US$ 4,090 million, remaining robust at US$ 3,505 million in 2022.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE experienced high instability, starting with a deficit of US$ 494 million in 2018. Although the figure turned positive in 2019 and 2020, it reverted to a negative value of US$ 133 million in 2021. A significant recovery occurred in 2022, with FCFE reaching its five-year peak of US$ 1,697 million.
- Divergence between Operating Cash and FCFE
- A critical divergence is noted in 2021, where the highest reported net cash from operating activities (US$ 4,090 million) coincided with a negative FCFE. This indicates that capital expenditures or net debt repayments significantly exceeded the operating cash generated during that year. In contrast, 2022 showed a convergence of strong operating performance and high equity cash flow, suggesting a reduction in capital intensity or a shift in financing activities.
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Price to FCFE Ratio, Current
United States Steel Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 222,963,794 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 1,697) |
| FCFE per share | 7.61 |
| Current share price (P) | 24.67 |
| Valuation Ratio | |
| P/FCFE | 3.24 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Freeport-McMoRan Inc. | 54.20 |
| P/FCFE, Industry | |
| Materials | 26.62 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
United States Steel Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 226,603,781 | 260,930,638 | 262,471,855 | 170,047,076 | 173,222,678 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 1,697) | (133) | 499) | 737) | (494) | |
| FCFE per share3 | 7.49 | -0.51 | 1.90 | 4.33 | -2.85 | |
| Share price1, 4 | 30.05 | 23.68 | 16.50 | 8.79 | 22.92 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 4.01 | — | 8.68 | 2.03 | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Freeport-McMoRan Inc. | 20.95 | 11.90 | — | — | — | |
| P/FCFE, Industry | ||||||
| Materials | 18.95 | 19.23 | — | — | — | |
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
= 1,697,000,000 ÷ 226,603,781 = 7.49
4 Closing price as at the filing date of United States Steel Corp. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 30.05 ÷ 7.49 = 4.01
6 Click competitor name to see calculations.
The financial performance between 2018 and 2022 is characterized by significant volatility in cash flow generation and a recovery in market valuation. The relationship between the share price and Free Cash Flow to Equity (FCFE) reflects an inconsistent ability to generate surplus cash for equity holders, leading to intermittent gaps in the P/FCFE valuation metric.
- Share Price Progression
- A sharp decline in market value was observed in 2019, with the share price dropping to 8.79 USD from 22.92 USD in 2018. This was followed by a sustained upward trajectory over the subsequent three years, culminating in a period high of 30.05 USD by December 31, 2022.
- FCFE per Share Volatility
- Free Cash Flow to Equity per share exhibited extreme fluctuations, alternating between negative and positive values. Negative FCFE was recorded in 2018 (-2.85 USD) and 2021 (-0.51 USD), indicating periods where capital expenditures and debt obligations exceeded cash inflows. Conversely, cash flow generation peaked in 2022 at 7.49 USD per share.
- P/FCFE Ratio Dynamics
- The P/FCFE ratio remained undefined for 2018 and 2021 due to negative FCFE. In 2019, the ratio was notably low at 2.03, suggesting the market undervalued the company relative to its cash flow during a period of depressed share prices. A peak ratio of 8.68 occurred in 2020, resulting from a contraction in FCFE per share to 1.90 USD while the share price recovered to 16.50 USD. By 2022, the ratio normalized to 4.01, as the significant increase in FCFE per share offset the rise in share price.
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