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).
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. U.S. Bancorp (USB): Market Cap $70.39B, Free Cash Flow $17.41B – P/FCF 3.937
2. Citigroup Inc (C): Market Cap $100.05B, Free Cash Flow $19.99B – P/FCF 4.765
3. Occidental Petroleum Corp (OXY): Market Cap $54.96B, Free Cash Flow $11.48B – P/FCF 4.993
4. Icahn Enterprises LP (IEP): Market Cap $16.49B, Free Cash Flow $2.479B – P/FCF 5.942
5. Dow Inc (DOW): Market Cap $36.95B, Free Cash Flow $6.386B – P/FCF 5.972
6. HP Inc (HPQ): Market Cap $34.73B, Free Cash Flow $5.234B – P/FCF 7.086
7. Dell Technologies Inc (DELL): Market Cap $33.58B, Free Cash Flow $4.939B – P/FCF 7.270
8. Markel Corp (MKL): Market Cap $15.76, Free Cash Flow $2.182B – P/FCF 7.320
9. American Express Co (AXP): Market Cap $118.12B, Free Cash Flow $15.52B – P/FCF 7.784
10. Moderna Inc (MRNA): Market Cap $73.08B, Free Cash Flow $9.215B – P/FCF 8.667
Here’s what they look like in one chart:
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