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Reynolds Consumer Products Inc. (REYN)

Company Dividend Discount ModelIndustry: Packaging & ContainersSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$10.22 - $14.71$12.41
Multi-Stage$17.39 - $19.05$18.20
Blended Fair Value$15.31
Current Price$24.47
Upside-37.45%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202420232022202120202019201820172016
DPS0.00%0.00%0.910.910.910.910.590.000.000.000.000.00
YoY Growth--0.00%0.00%0.00%54.84%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--3.82%3.15%3.32%3.11%1.98%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)304.00
(-) Cash Dividends Paid (M)192.00
(=) Cash Retained (M)112.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)60.8038.0022.80
Cash Retained (M)112.00112.00112.00
(-) Cash Required (M)-60.80-38.00-22.80
(=) Excess Retained (M)51.2074.0089.20
(/) Shares Outstanding (M)210.48210.48210.48
(=) Excess Retained per Share0.240.350.42
LTM Dividend per Share0.910.910.91
(+) Excess Retained per Share0.240.350.42
(=) Adjusted Dividend1.161.261.34
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$10.22$12.41$14.71
Upside / Downside-58.23%-49.28%-39.87%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)304.00300.96297.95294.97292.02289.10297.77
Payout Ratio63.16%68.53%73.89%79.26%84.63%90.00%92.50%
Projected Dividends (M)192.00206.24220.17233.80247.14260.19275.44

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)187.16189.07190.98
Year 2 PV (M)181.32185.04188.80
Year 3 PV (M)174.74180.14185.66
Year 4 PV (M)167.62174.57181.73
Year 5 PV (M)160.15168.49177.17
PV of Terminal Value (M)2,788.392,933.593,084.77
Equity Value (M)3,659.383,830.904,009.11
Shares Outstanding (M)210.48210.48210.48
Fair Value$17.39$18.20$19.05
Upside / Downside-28.95%-25.62%-22.16%

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