Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
HCA Healthcare 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 examination of the cash flow dynamics from 2017 to 2021 reveals a divergence between the steady growth of operating cash flows and the volatility of free cash flow to equity (FCFE).
- Operating Cash Flow Performance
- Net cash provided by operating activities demonstrated a consistent upward trajectory for the majority of the period. From 2017 to 2020, operating cash flows increased annually, rising from 5,426 million US$ to a peak of 9,232 million US$. A marginal contraction occurred in 2021, with the figure settling at 8,959 million US$, yet the overall five-year trend remains strongly positive.
- FCFE Volatility and Trends
- Unlike the steady growth in operating cash flows, FCFE exhibited significant fluctuations. A decline was noted in 2018 (2,819 million US$) and again in 2020 (3,145 million US$), interrupted by a recovery in 2019 (3,938 million US$). However, 2021 marked a substantial surge, with FCFE reaching 8,599 million US$, representing the highest value within the analyzed timeframe.
- Cash Flow Conversion Analysis
- The relationship between operating cash flow and FCFE indicates varying levels of capital allocation and financing activities. Between 2017 and 2020, a substantial portion of operating cash was utilized for capital expenditures or debt reduction, as FCFE remained significantly lower than operating cash flows. In 2021, the gap narrowed considerably, with FCFE nearly converging with operating cash flow, suggesting a period of reduced capital intensity or significant net debt inflows.
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Price to FCFE Ratio, Current
HCA Healthcare Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 295,484,400 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 8,599) |
| FCFE per share | 29.10 |
| Current share price (P) | 216.30 |
| Valuation Ratio | |
| P/FCFE | 7.43 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Abbott Laboratories | 30.32 |
| Elevance Health Inc. | 22.59 |
| Intuitive Surgical Inc. | 57.47 |
| Medtronic PLC | 26.67 |
| UnitedHealth Group Inc. | 20.12 |
| P/FCFE, Sector | |
| Health Care Equipment & Services | 18.27 |
| P/FCFE, Industry | |
| Health Care | 26.13 |
Based on: 10-K (reporting date: 2021-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
HCA Healthcare Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 303,600,000 | 339,917,500 | 338,427,300 | 342,376,700 | 349,903,700 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 8,599) | 3,145) | 3,938) | 2,819) | 3,894) | |
| FCFE per share3 | 28.32 | 9.25 | 11.64 | 8.23 | 11.13 | |
| Share price1, 4 | 244.10 | 177.37 | 148.11 | 142.01 | 100.84 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 8.62 | 19.17 | 12.73 | 17.25 | 9.06 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Abbott Laboratories | 24.52 | — | — | — | — | |
| Elevance Health Inc. | 11.07 | — | — | — | — | |
| Intuitive Surgical Inc. | 58.39 | — | — | — | — | |
| Medtronic PLC | 38.91 | — | — | — | — | |
| UnitedHealth Group Inc. | 20.11 | — | — | — | — | |
| P/FCFE, Sector | ||||||
| Health Care Equipment & Services | 22.14 | — | — | — | — | |
| P/FCFE, Industry | ||||||
| Health Care | 17.94 | — | — | — | — | |
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
= 8,599,000,000 ÷ 303,600,000 = 28.32
4 Closing price as at the filing date of HCA Healthcare Inc. Annual Report.
5 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 244.10 ÷ 28.32 = 8.62
6 Click competitor name to see calculations.
The financial performance from 2017 to 2021 is characterized by a consistent increase in market valuation contrasted with high volatility in cash flow generation. While the share price maintained a steady upward trajectory, the free cash flow to equity (FCFE) per share exhibited significant fluctuations, leading to a non-linear trend in the P/FCFE ratio.
- Share Price Appreciation
- A sustained growth pattern is observed in the share price, which rose from 100.84 US$ in 2017 to 244.10 US$ in 2021. This represents a continuous expansion in the market's valuation of the equity over the five-year period.
- FCFE per Share Volatility
- Cash flow available to equity holders per share lacked a consistent trend, experiencing declines in 2018 and 2020. However, a substantial surge occurred in 2021, where FCFE per share reached 28.32 US$, a significant increase compared to the 9.25 US$ recorded in the preceding year.
- P/FCFE Ratio Dynamics
- The P/FCFE ratio fluctuated considerably, reflecting the imbalance between price growth and cash flow stability. The ratio increased from 9.06 in 2017 to a peak of 19.17 in 2020, indicating that the share price was growing at a faster rate than the FCFE. This trend reversed sharply in 2021, with the ratio dropping to 8.62. This compression was driven by the dramatic increase in FCFE per share, which outpaced the share price growth, resulting in a lower valuation multiple relative to cash flow.
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