UnitedHealth Group Inc. (UNH)

Price to FCFE (P/FCFE)

Difficulty: Intermediate

UnitedHealth Group Inc., FCFE calculation

USD $ in millions

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net earnings attributable to UnitedHealth Group common shareholders
	Earnings attributable to noncontrolling interests
	Net noncash charges
	Net change in other operating items, net of effects from acquisitions and changes in AARP balances
	Cash flows from operating activities
	Purchases of property, equipment and capitalized software
	Repayments of long-term debt
	Proceeds from (repayments of) commercial paper, net
	Proceeds from issuance of long-term debt
	Free cash flow to equity (FCFE)

Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to UnitedHealth Group Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	UnitedHealth Group Inc.’s FCFE declined from 2016 to 2017 but then increased from 2017 to 2018 exceeding 2016 level.

UnitedHealth Group Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding
Selected Financial Data (USD $)
Free cash flow to equity (FCFE) (in millions)
FCFE per share
Current share price (P)
Ratio
P/FCFE
Benchmarks
P/FCFE, Competitors
Becton, Dickinson & Co.
Intuitive Surgical Inc.
Medtronic PLC
Stryker Corp.
Thermo Fisher Scientific Inc.
P/FCFE, Sector
Health Care Equipment & Services
P/FCFE, Industry
Health Care

If company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.

Otherwise, if company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

UnitedHealth Group Inc., historical P/FCFE calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	No. shares of common stock outstanding¹
	Selected Financial Data (USD $)
	Free cash flow to equity (FCFE) (in millions)²
	FCFE per share⁴
	Share price^1, 3
	Ratio
	P/FCFE⁵
	Benchmarks
	P/FCFE, Competitors
	Becton, Dickinson & Co.
	Intuitive Surgical Inc.
	Medtronic PLC
	Stryker Corp.
	Thermo Fisher Scientific Inc.
	P/FCFE, Sector
	Health Care Equipment & Services
	P/FCFE, Industry
	Health Care

¹ Data adjusted for splits and stock dividends.

³ Close price on the filing date of UnitedHealth Group Inc.’s Annual Report.

2018 Calculations

⁴ FCFE per share = FCFE ÷ No. shares of common stock outstanding
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⁵ P/FCFE = Share price ÷ FCFE per share
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Ratio	Description	The company
P/FCFE	Price to free cash flow to equity is cash valuation indicator of stockholders’ equity.	UnitedHealth Group Inc.’s P/FCFE ratio increased from 2016 to 2017 but then declined significantly from 2017 to 2018.

	UnitedHealth Group Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality