Definitive Analysis
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Graham Holdings Company (GHC)

Company Dividend Discount ModelIndustry: Education & Training ServicesSector: Consumer Defensive

Valuation Snapshot

Stable Growth$2,609.58 - $4,917.16$3,545.75
Multi-Stage$2,431.50 - $2,663.32$2,545.26
Blended Fair Value$3,045.50
Current Price$1,177.31
Upside158.68%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.53%-7.77%6.967.107.046.916.876.776.566.496.2612.31
YoY Growth---1.96%0.78%1.91%0.55%1.41%3.27%1.02%3.67%-49.14%-21.13%
Dividend Yield--0.72%0.94%1.18%1.13%1.22%1.99%0.96%1.08%1.04%2.57%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)732.36
(-) Cash Dividends Paid (M)30.93
(=) Cash Retained (M)701.43
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)146.4791.5454.93
Cash Retained (M)701.43701.43701.43
(-) Cash Required (M)-146.47-91.54-54.93
(=) Excess Retained (M)554.96609.89646.50
(/) Shares Outstanding (M)4.364.364.36
(=) Excess Retained per Share127.21139.80148.20
LTM Dividend per Share7.097.097.09
(+) Excess Retained per Share127.21139.80148.20
(=) Adjusted Dividend134.30146.89155.29
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.76%4.76%5.76%
Fair Value$2,609.58$3,545.75$4,917.16
Upside / Downside121.66%201.17%317.66%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)732.36767.21803.71841.95882.01923.98951.70
Payout Ratio4.22%21.38%38.53%55.69%72.84%90.00%92.50%
Projected Dividends (M)30.93164.02309.70468.88642.50831.58880.32

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.76%4.76%5.76%
Year 1 PV (M)148.90150.34151.77
Year 2 PV (M)255.26260.20265.19
Year 3 PV (M)350.84361.08371.52
Year 4 PV (M)436.46453.53471.10
Year 5 PV (M)512.85538.05564.22
PV of Terminal Value (M)8,903.129,340.509,794.91
Equity Value (M)10,607.4411,103.7111,618.72
Shares Outstanding (M)4.364.364.36
Fair Value$2,431.50$2,545.26$2,663.32
Upside / Downside106.53%116.19%126.22%

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