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 cash flow performance from 2017 to 2021 is characterized by a general growth trend interrupted by a significant contraction in 2020. While operating cash flows remained relatively robust throughout the period, free cash flow to equity exhibited higher volatility, particularly during the 2020 fiscal year.
- Net Cash Provided by Operating Activities
- Operating cash flow experienced a substantial increase between 2017 and 2018, rising from 739,606 thousand US$ to 1,415,469 thousand US$. Following a period of stability in 2019, a decline was observed in 2020, where values fell to 987,032 thousand US$. However, 2021 marked a peak for the period, with operating cash flow reaching 2,204,136 thousand US$, indicating a strong recovery in core operational liquidity.
- Free Cash Flow to Equity (FCFE)
- FCFE followed a similar growth trajectory to operating cash flow from 2017 through 2019, peaking at 1,254,155 thousand US$. A sharp decline occurred in 2020, with FCFE dropping to 134,806 thousand US$. This metric recovered significantly in 2021, returning to 1,192,451 thousand US$, which aligns with the broader recovery seen in operating activities.
- Analysis of Cash Flow Divergence
- A notable divergence between operating cash flow and FCFE is observed in 2020. While operating cash flow decreased by approximately 29% compared to 2019, FCFE plummeted by nearly 89%. This disparity suggests that during 2020, a significant portion of the cash generated from operations was allocated toward capital expenditures or debt repayments, substantially reducing the cash available to equity holders. In contrast, the alignment of both metrics in 2021 indicates a return to a more balanced capital allocation strategy.
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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$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,192,451) |
| FCFE per share | 6.79 |
| Current share price (P) | 98.04 |
| Valuation Ratio | |
| P/FCFE | 14.43 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Freeport-McMoRan Inc. | 61.02 |
| P/FCFE, Industry | |
| Materials | 27.96 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Steel Dynamics Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 191,299,162 | 211,005,100 | 213,554,449 | 224,105,246 | 236,071,369 | |
| Selected Financial Data (US$) | ||||||
| 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 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Materials | 19.23 | — | — | — | — | |
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 from 2017 to 2021 reveals significant volatility in the relationship between share price and Free Cash Flow to Equity (FCFE) per share. While the share price followed a U-shaped trajectory, ending the period at its highest point, the P/FCFE ratio experienced extreme fluctuations, particularly in 2020, indicating a period of disconnect between market valuation and cash flow generation.
- Share Price Trends
- A downward trend was observed from 2017 to 2019, with the share price declining from 47.51 to a period low of 26.89. This was followed by a rapid recovery and expansion, with the price ascending to 44.01 in 2020 and reaching a peak of 70.58 by the end of 2021.
- FCFE per Share Performance
- FCFE per share grew steadily from 2.48 in 2017 to 5.87 in 2019. However, a severe contraction occurred in 2020, where the value plummeted to 0.64. This downturn was short-lived, as 2021 saw a robust recovery to 6.23, the highest value recorded in the five-year period.
- P/FCFE Ratio Analysis
- The P/FCFE ratio shifted from 19.18 in 2017 to a low of 4.58 in 2019, suggesting a compression in valuation multiples relative to cash flow. A significant anomaly occurred in 2020, where the ratio spiked to 68.89; this was driven by the simultaneous increase in share price and the sharp decline in FCFE per share. By 2021, the ratio normalized to 11.32, reflecting a more balanced alignment between the market price and the recovered cash flow levels.
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