This week we take a look at some big named companies that generate huge ‘free’ cash flows compared to their market cap, using the price to free cash flow ratio (P/FCF).
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Price to free cash flow (P/FCF) is an valuation metric that compares a company’s per-share market price to its free cash flow (FCF). This metric is very similar to the valuation metric of price to cash flow but is considered a more exact measure because it uses free cash flow, which subtracts capital expenditures (CAPEX) from a company’s total operating cash flow, thereby reflecting the actual cash flow available to fund non-asset-related growth.
Here’s 10 big named companies with huge free cash flows compared to their market cap:
1. JPMorgan Chase & Co (JPM): Market Cap $358B, Free Cash Flow $132B – P/FCF 2.75
2. MetLife Inc (MET): Market Cap $54B, Free Cash Flow $15B – P/FCF 3.71
3. Marathon Petroleum Corp (MPC): Market Cap $48.6B, Free Cash Flow $8.62B – P/FCF 5.63
4. Valero Energy Corp (VLO): Market Cap $45.39B, Free Cash Flow $8.67B – P/FCF 5.40
5. Capital One Financial Corp (COF): Market Cap $44.41B, Free Cash Flow $8.71B – P/FCF 5.54
6. Cheniere Energy Inc (LNG): Market Cap $39.62B, Free Cash Flow $4.72B – P/FCF 8.59
7. Nucor Corp (NUE): Market Cap $37.45B, Free Cash Flow $7.19B – P/FCF 5.51
8. State Street Corporation (STT): Market Cap $27.54, Free Cash Flow $4.29B – P/FCF 6.40
9. Hologic Inc (HOLX): Market Cap $18.22B, Free Cash Flow $2.31B – P/FCF 8.08
10. Expedia Group Inc (EXPE): Market Cap $17.88B, Free Cash Flow $3.05B – P/FCF 5.85
Here’s what they look like in one chart:
JPM Price to Free Cash Flow data by YCharts
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Article by The Acquirer's Multiple.
