Capital spending consistency (Capex consistency)
How much annual capital spending varies relative to its own average. Lower means more predictable.
Predictable investment needs make free cash flow forecastable, which is most of what a valuation rests on.
How it is computed here
Standard deviation of annual capital expenditure / mean capital expenditure
Computed across several filed fiscal years. Filed under quality. Lower is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Lower is better here.
- A company in a genuine expansion phase looks inconsistent while doing exactly the right thing.
- Meaningless for businesses that barely invest at all.
Questions
How is capital spending consistency calculated?
Standard deviation of annual capital expenditure / mean capital expenditure. Computed across several filed fiscal years.
What does capital spending consistency tell a value investor?
Predictable investment needs make free cash flow forecastable, which is most of what a valuation rests on.
When does capital spending consistency mislead?
Lower is better here. A company in a genuine expansion phase looks inconsistent while doing exactly the right thing. Meaningless for businesses that barely invest at all.