Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Steel Dynamics Inc., FCFE calculation
US$ in thousands
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).
The financial data reveals notable fluctuations in both net cash provided by operating activities and free cash flow to equity (FCFE) over the five-year period ending in 2021. The analysis highlights the following trends and observations:
- Net Cash Provided by Operating Activities
- This metric experienced significant growth between 2017 and 2018, nearly doubling from approximately 740 million US dollars to over 1.4 billion US dollars. It largely stabilized in 2019 with a value close to that of 2018. However, a considerable decline occurred in 2020, dropping to just under 1 billion US dollars. The year 2021 showed a strong recovery, with the cash flow more than doubling from the previous year to exceed 2.2 billion US dollars, marking the highest figure in the observed period.
- Free Cash Flow to Equity (FCFE)
- FCFE followed an upward trend from 2017 through 2019, increasing from nearly 585 million US dollars to over 1.25 billion US dollars. This steady growth was interrupted in 2020 by a sharp decline, plunging the FCFE to around 135 million US dollars—a significant reduction compared to previous years. In 2021, FCFE rebounded substantially to approximately 1.19 billion US dollars, nearing the peak achieved in 2019.
- Comparative Insights
- Both operating cash flows and FCFE exhibited parallel trends, indicating a strong correlation between cash generated from operations and the free cash available to equity holders. The dip observed in 2020 across both metrics likely reflects adverse conditions impacting the company’s cash generation capability during that year. The substantial recovery in 2021 suggests a return to more favorable operational performance and capital allocation.
Overall, the data indicates that the company experienced a temporary downturn in operational cash flow and equity cash flow in 2020, followed by pronounced recovery in 2021, exceeding prior peak levels. The general upward progression from 2017 through 2019 reflects a period of robust financial performance prior to the 2020 decline.
Price to FCFE Ratio, Current
Steel Dynamics Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 175,571,409 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,192,451) |
| FCFE per share | 6.79 |
| Current share price (P) | 98.04 |
| Valuation Ratio | |
| P/FCFE | 14.43 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Freeport-McMoRan Inc. | 35.01 |
| P/FCFE, Industry | |
| Materials | 25.43 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Steel Dynamics Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 191,299,162 | 211,005,100 | 213,554,449 | 224,105,246 | 236,071,369 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,192,451) | 134,806) | 1,254,155) | 1,166,195) | 584,798) | |
| FCFE per share3 | 6.23 | 0.64 | 5.87 | 5.20 | 2.48 | |
| Share price1, 4 | 70.58 | 44.01 | 26.89 | 37.95 | 47.51 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 11.32 | 68.89 | 4.58 | 7.29 | 19.18 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Freeport-McMoRan Inc. | 11.90 | 55.60 | — | — | — | |
| P/FCFE, Industry | ||||||
| Materials | 19.23 | 27.42 | — | — | — | |
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
= 1,192,451,000 ÷ 191,299,162 = 6.23
4 Closing price as at the filing date of Steel Dynamics Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 70.58 ÷ 6.23 = 11.32
6 Click competitor name to see calculations.
The financial data reveals notable fluctuations in the company's share price, free cash flow to equity (FCFE) per share, and the price-to-FCFE (P/FCFE) ratio over the five-year period.
- Share Price
- The share price experienced a declining trend from 2017 ($47.51) to 2019 ($26.89), followed by a recovery in 2020 ($44.01) and a significant increase in 2021 ($70.58). This indicates a period of decreasing market valuation initially, with a pronounced rebound in the last two years.
- FCFE per Share
- FCFE per share demonstrated variability during the period. It rose substantially from 2017 ($2.48) to 2019 ($5.87), then sharply dropped to $0.64 in 2020, before recovering again to $6.23 in 2021. The sharp decline in 2020 suggests an operational or cash flow challenge that year, followed by a strong recovery.
- P/FCFE Ratio
- The P/FCFE ratio decreased consistently from 19.18 in 2017 to a low of 4.58 in 2019, indicating a market valuation becoming more attractive relative to FCFE during those years. However, in 2020, this ratio spiked dramatically to 68.89, reflecting either a decline in FCFE per share or an increase in share price that was disproportionate to the cash flow. In 2021, the ratio normalized to 11.32, suggesting a rebalancing of market valuation in line with improved FCFE.
Overall, the data suggests the company underwent financial stress around 2020, impacting cash flow generation sharply. The subsequent recovery is evident in both FCFE per share and share price, though the P/FCFE ratio indicates the market valuation adjusted significantly in response to these changes.