Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Kimberly-Clark Corp., FCFE calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2016-12-31).
The cash flow profile between 2016 and 2020 is characterized by moderate volatility followed by a strong recovery in the final period. Both operating cash flow and free cash flow to equity (FCFE) exhibited synchronized movements, suggesting that FCFE is tightly coupled with operational performance.
- Operating Cash Flow Trends
- Cash provided by operations experienced a general decline from US$ 3,232 million in 2016 to a period low of US$ 2,736 million in 2019, despite a marginal recovery in 2018. This trend was reversed sharply in 2020, with cash from operations increasing to US$ 3,729 million, the highest value observed in the five-year period.
- Free Cash Flow to Equity (FCFE) Performance
- FCFE mirrored the trajectory of operating cash flow, declining from US$ 2,271 million in 2016 to US$ 1,963 million in 2017, and fluctuating between US$ 2,071 million and US$ 2,210 million through 2019. A significant expansion occurred in 2020, where FCFE rose to US$ 2,973 million, representing a substantial increase over the preceding four years.
- Cash Conversion Analysis
- A positive trend in the conversion of operating cash to FCFE is observable. The proportion of operating cash flow that transitioned into FCFE rose from approximately 70% in 2016 to approximately 80% by 2020. This indicates an improved ability to generate cash available to equity holders relative to the cash generated from core operations.
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Price to FCFE Ratio, Current
Kimberly-Clark Corp., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 337,431,588 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | 2,973) |
| FCFE per share | 8.81 |
| Current share price (P) | 132.11 |
| Valuation Ratio | |
| P/FCFE | 14.99 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Procter & Gamble Co. | 22.56 |
Based on: 10-K (reporting date: 2020-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Kimberly-Clark Corp., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 338,363,924 | 341,795,666 | 344,431,630 | 350,706,285 | 356,274,872 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | 2,973) | 2,071) | 2,210) | 1,963) | 2,271) | |
| FCFE per share3 | 8.79 | 6.06 | 6.42 | 5.60 | 6.37 | |
| Share price1, 4 | 132.09 | 144.74 | 113.36 | 111.69 | 122.93 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 15.03 | 23.89 | 17.67 | 19.95 | 19.29 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Procter & Gamble Co. | — | — | — | — | — | |
Based on: 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), 10-K (reporting date: 2016-12-31).
1 Data adjusted for splits and stock dividends.
3 2020 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 2,973,000,000 ÷ 338,363,924 = 8.79
4 Closing price as at the filing date of Kimberly-Clark Corp. Annual Report.
5 2020 Calculation
P/FCFE = Share price ÷ FCFE per share
= 132.09 ÷ 8.79 = 15.03
6 Click competitor name to see calculations.
The financial performance and valuation metrics from 2016 to 2020 exhibit significant fluctuations, particularly regarding the relationship between market pricing and free cash flow to equity (FCFE).
- Share Price Trends
- The share price experienced a period of volatility, declining from 122.93 US$ in 2016 to 111.69 US$ in 2017, before reaching a five-year peak of 144.74 US$ in 2019 and subsequently retreating to 132.09 US$ by the end of 2020.
- FCFE per Share Performance
- Free cash flow to equity per share remained relatively stable between 2016 and 2019, fluctuating within a narrow range from 5.60 US$ to 6.42 US$. A notable surge occurred in 2020, where the value increased to 8.79 US$, representing the highest level of cash flow generation per share within the analyzed period.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio demonstrates non-linear progression, reflecting shifts in market valuation relative to cash flow. The ratio peaked at 23.89 in 2019, driven by a sharp increase in share price that was not accompanied by a corresponding increase in FCFE per share. Conversely, 2020 saw the ratio drop to its lowest point of 15.03, resulting from a combined decrease in share price and a substantial increase in FCFE per share.
The analysis indicates a significant valuation contraction in 2020. While the 2019 peak suggested an overextension of the share price relative to cash flow, the 2020 figures show a convergence where fundamental cash flow growth outpaced the market price, leading to a lower and potentially more sustainable valuation multiple.
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