Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Waste Management Inc., FCFE calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2017-12-31).
An analysis of the cash flow metrics from 2017 to 2021 reveals a divergence between operational cash generation and the cash available to equity holders. While operating activities showed a generally positive growth trajectory, free cash flow to equity exhibited significant volatility over the five-year period.
- Net Cash Provided by Operating Activities
- A general upward trend is observed in operational cash flow, which grew from 3,180 million US dollars in 2017 to a peak of 4,338 million US dollars in 2021. A brief contraction was noted in 2020, when the value declined to 3,403 million US dollars, before rebounding strongly in the following year.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE demonstrated substantial fluctuations. Following an increase from 1,296 million US dollars in 2017 to 2,189 million US dollars in 2018, the metric reached a peak of 5,121 million US dollars in 2019. This was followed by a sharp decline in 2020 to 1,532 million US dollars, with a slight recovery to 1,767 million US dollars by the end of 2021.
- Correlation Between Operating Cash and FCFE
- The relationship between operating cash flow and FCFE is inconsistent. In 2019, FCFE significantly exceeded net cash provided by operating activities, suggesting that the cash available to shareholders was bolstered by non-operational sources, such as a substantial decrease in capital expenditures or an increase in net borrowing. In contrast, during 2020 and 2021, FCFE remained markedly lower than operating cash flow, indicating a period of higher capital reinvestment or debt amortization.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Price to FCFE Ratio, Current
Waste Management Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 414,586,718 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 1,767) |
| FCFE per share | 4.26 |
| Current share price (P) | 142.68 |
| Valuation Ratio | |
| P/FCFE | 33.48 |
| Benchmarks | |
Based on: 10-K (reporting date: 2021-12-31).
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
Waste Management Inc., historical P/FCFE calculation, comparison to benchmarks
Based on: 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), 10-K (reporting date: 2017-12-31).
1 Data adjusted for splits and stock dividends.
3 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,767,000,000 ÷ 414,586,718 = 4.26
4 Closing price as at the filing date of Waste Management Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 142.68 ÷ 4.26 = 33.48
The financial trajectory from 2017 to 2021 is characterized by a general increase in share price coupled with significant volatility in Free Cash Flow to Equity (FCFE), which directly influenced the Price to FCFE (P/FCFE) valuation ratio.
- Share Price Analysis
- An overall upward trend is observed in the share price, which rose from 84.02 in 2017 to 142.68 by the end of 2021. While a temporary decline occurred in 2020 to 110.56, the price recovered strongly in the final year of the period.
- FCFE per Share Performance
- Free Cash Flow to Equity per share exhibited high volatility. A substantial spike occurred in 2019, where the value reached 12.06, representing a significant increase from 2.99 in 2017. This peak was followed by a sharp contraction to 3.62 in 2020 and a slight recovery to 4.26 in 2021.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio demonstrated an inverse correlation with FCFE per share. The ratio compressed from 28.12 in 2017 to a five-year low of 10.30 in 2019, driven by the surge in cash flow. Subsequently, as FCFE per share declined, the ratio expanded rapidly, reaching 30.54 in 2020 and peaking at 33.48 in 2021.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?