One of the main indicators for any company is free cash flow. (free cash flow, FCF). Good, when this flow is stable, but even better, when it grows for several years.
Free cash flow is money, that the company receives from its main operating activities, excluding capital investments. Free cash flow determines, how much the company is able to pay off debt, pay dividends, buy back own shares or take over other companies.
When evaluating shares, investors should analyze not only the size of the net profit, but also free cash flow. A company's net income can be affected by various non-monetary items, and the company can also sell a product or service in installments and not get real money for it. Free cash flow is free from these disadvantages.
The MarketWatch portal selected companies from S&P 500 with large and steadily growing free cash flow over the past few years. Since 2017 Amazon (NASDAQ: AMZN) the fastest growing FCF. Facebook has become the best in five years (NASDAQ: FB), although in the past three years the company has become only nineteenth in terms of FCF growth.
Companies with fast FCF growth in the last three years, billion dollars
| Ticker | Name | FCF in 2020 year | Average annual growth of FCF |
|---|---|---|---|
| AMZN | Amazon | 25,9 | 59,3% |
| VZ | Verizon | 23,6 | 43,0% |
| CVS | CVS | 13,4 | 30,2% |
| AVGO | Broadcom | 12,1 | 28,0% |
| INTC | Intel | 21,1 | 26,9% |
| KO | Coca Cola | 8,7 | 21,7% |
| GOOGL | Alphabet | 42,8 | 21,5% |
| ABBV | AbbVie | 16,8 | 21,2% |
| UNH | UnitedHealth | 20,1 | 20,2% |
| HD | Home Depot | 17,0 | 19,2% |
Amazon(AMZN)
FCF in 2020 year
25,9
Average annual growth of FCF
59,3%
Verizon(VZ)
FCF in 2020 year
23,6
Average annual growth of FCF
43,0%
CVS(CVS)
FCF in 2020 year
13,4
Average annual growth of FCF
30,2%
Broadcom(AVGO)
FCF in 2020 year
12,1
Average annual growth of FCF
28,0%
Intel(INTC)
FCF in 2020 year
21,1
Average annual growth of FCF
26,9%
Coca Cola(KO)
FCF in 2020 year
8,7
Average annual growth of FCF
21,7%
Alphabet(GOOGL)
FCF in 2020 year
42,8
Average annual growth of FCF
21,5%
AbbVie(ABBV)
FCF in 2020 year
16,8
Average annual growth of FCF
21,2%
UnitedHealth(UNH)
FCF in 2020 year
20,1
Average annual growth of FCF
20,2%
Home Depot(HD)
FCF in 2020 year
17,0
Average annual growth of FCF
19,2%
Companies with fast FCF growth in the last five years, billion dollars
| Ticker | Name | FCF in 2020 year | Average annual growth of FCF |
|---|---|---|---|
| FB | 23,6 | 31,2% | |
| AMZN | Amazon | 25,9 | 28,7% |
| GOOGL | Alphabet | 42,8 | 20,8% |
| UNH | UnitedHealth | 20,1 | 19,7% |
| ABBV | AbbVie | 16,8 | 19,1% |
| CVS | CVS | 13,4 | 17,3% |
| HD | Home Depot | 17,0 | 16,7% |
| MSFT | Microsoft | 50,4 | 15,7% |
| F | Ford | 18,5 | 15,6% |
| INTC | Intel | 21,1 | 12,6% |
Facebook(FB)
FCF in 2020 year
23,6
Average annual growth of FCF
31,2%
Amazon(AMZN)
FCF in 2020 year
25,9
Average annual growth of FCF
28,7%
Alphabet(GOOGL)
FCF in 2020 year
42,8
Average annual growth of FCF
20,8%
UnitedHealth(UNH)
FCF in 2020 year
20,1
Average annual growth of FCF
19,7%
AbbVie(ABBV)
FCF in 2020 year
16,8
Average annual growth of FCF
19,1%
CVS(CVS)
FCF in 2020 year
13,4
Average annual growth of FCF
17,3%
Home Depot(HD)
FCF in 2020 year
17,0
Average annual growth of FCF
16,7%
Microsoft(MSFT)
FCF in 2020 year
50,4
Average annual growth of FCF
15,7%
Ford(F)
FCF in 2020 year
18,5
Average annual growth of FCF
15,6%
Intel(INTC)
FCF in 2020 year
21,1
Average annual growth of FCF
12,6%
