Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)
P to FCFE Ratio, Current
P to FCFE Ratio, Historical

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Free Cash Flow to Equity (FCFE)

National Oilwell Varco Inc., FCFE calculation

US$ in millions

	12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
	Net income (loss) attributable to Company
	Net (income) loss attributable to noncontrolling interests
	Net noncash charges
	Change in operating assets and liabilities, net of acquisitions
	Net cash provided by operating activities
	Purchases of property, plant and equipment
	Borrowings against lines of credit and other debt
	Payments against lines of credit and other debt
	Free cash flow to equity (FCFE)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Net Cash Provided by Operating Activities: The net cash provided by operating activities exhibited significant fluctuations over the five-year period. Beginning at 2,143 million USD in 2011, there was a substantial decline to 620 million USD in 2012. However, 2013 saw a dramatic increase to 3,397 million USD, the highest in the timeframe analyzed. This was followed by a decline to 2,525 million USD in 2014, and again to 1,332 million USD by the end of 2015. Overall, the series shows volatility, with a notable peak in 2013 and a downward trend thereafter.
Free Cash Flow to Equity (FCFE): The free cash flow to equity also displayed considerable variation. Starting at 1,269 million USD in 2011, it increased sharply to 2,674 million USD in 2012. The upward momentum continued into 2013, with a modest increase to 2,727 million USD, marking the highest observed value. However, from 2014 onwards, FCFE trended downward, declining to 1,844 million USD and further to 1,641 million USD in 2015. Despite the declines post-2013, FCFE levels in 2015 remained above the initial 2011 value.
Comparative Insights: Comparing the two metrics, it is notable that the free cash flow to equity generally displayed a more stable upward trend early on, while net cash from operations saw more pronounced volatility. The peak for operating cash was in 2013, whereas FCFE peaked around the same year but maintained a higher baseline in subsequent years relative to operating cash flow. The decline in both metrics post-2013 suggests potentially challenging conditions affecting liquidity and cash distribution capacity by year-end 2015. The sustained positive FCFE indicates that, despite operational volatility, the company maintained some capacity to return cash to equity holders.

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Price to FCFE Ratio, Current

National Oilwell Varco Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)
FCFE per share
Current share price (P)
Valuation Ratio
P/FCFE
Benchmarks
P/FCFE, Competitors¹
Schlumberger Ltd.

Based on: 10-K (reporting date: 2015-12-31).

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

National Oilwell Varco Inc., historical P/FCFE calculation, comparison to benchmarks

		Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
	No. shares of common stock outstanding¹
	Selected Financial Data (US$)
	Free cash flow to equity (FCFE) (in millions)²
	FCFE per share³
	Share price^1, 4
	Valuation Ratio
	P/FCFE⁵
	Benchmarks
	P/FCFE, Competitors⁶
	Schlumberger Ltd.

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2015 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= ÷ =

⁴ Closing price as at the filing date of National Oilwell Varco Inc. Annual Report.

⁵ 2015 Calculation
P/FCFE = Share price ÷ FCFE per share
= ÷ =

⁶ Click competitor name to see calculations.

Share Price Trend: The share price exhibited a declining trend over the period from December 31, 2011 to December 31, 2015. It started at $86.23 and decreased substantially to $29.30 by the end of 2015. The most notable drops occurred between 2011 and 2012, and again between 2013 and 2015, indicating considerable downward pressure on the market valuation during these years.
Free Cash Flow to Equity (FCFE) per Share Trend: FCFE per share showed a generally rising trend from 2011 to 2013, increasing from $2.99 to $6.36. Thereafter, it decreased slightly to $4.50 in 2014 and experienced a marginal decline to $4.37 in 2015. Despite this recent decline, FCFE per share remained significantly above the 2011 level, suggesting that cash generation available to shareholders improved overall compared to the start of the period.
Price to FCFE Ratio (P/FCFE) Trend: The P/FCFE ratio dropped sharply from 28.83 in 2011 to 10.87 in 2012, indicating a substantial repricing of the company’s equity relative to its free cash flow generation. It then stabilized somewhat, fluctuating slightly around 12 in 2013 and 2014, before declining further to 6.71 in 2015. This downward trend in the P/FCFE ratio suggests increasing market skepticism or more attractive valuation levels relative to the company’s free cash flow per share in later years.
Overall Insights: Although the company’s free cash flow per share generally improved in the early years, the share price declined sharply throughout the observed period, resulting in a reduction of the market valuation multiples. The sustained decrease in share price coupled with relatively stable FCFE in the last two years indicates a shift in market perception or external factors impacting investor confidence. The decreasing P/FCFE ratio reflects a lower premium placed on the company’s cash flow generation ability, possibly signaling increased risk, industry challenges, or changes in the macroeconomic environment during this timeframe.