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Nordstrom, Inc. (JWN)

Company Dividend Discount ModelIndustry: Department StoresSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$8.60 - $11.68$10.17
Multi-Stage$16.80 - $18.49$17.63
Blended Fair Value$13.90
Current Price$24.20
Upside-42.57%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS-11.55%-6.81%0.740.730.710.000.351.361.491.471.537.06
YoY Growth--0.81%3.36%0.00%-100.00%-74.67%-8.40%1.21%-3.52%-78.40%372.11%
Dividend Yield--3.05%3.65%4.59%0.00%0.94%7.73%3.70%2.97%3.16%13.81%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)295.00
(-) Cash Dividends Paid (M)124.00
(=) Cash Retained (M)171.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)59.0036.8822.13
Cash Retained (M)171.00171.00171.00
(-) Cash Required (M)-59.00-36.88-22.13
(=) Excess Retained (M)112.00134.13148.88
(/) Shares Outstanding (M)167.78167.78167.78
(=) Excess Retained per Share0.670.800.89
LTM Dividend per Share0.740.740.74
(+) Excess Retained per Share0.670.800.89
(=) Adjusted Dividend1.411.541.63
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-6.25%-5.25%-4.25%
Fair Value$8.60$10.17$11.68
Upside / Downside-64.46%-57.98%-51.74%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)295.00279.50264.82250.90237.72225.23231.99
Payout Ratio42.03%51.63%61.22%70.81%80.41%90.00%92.50%
Projected Dividends (M)124.00144.30162.12177.67191.14202.71214.59

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-6.25%-5.25%-4.25%
Year 1 PV (M)130.89132.29133.68
Year 2 PV (M)133.39136.25139.15
Year 3 PV (M)132.61136.89141.27
Year 4 PV (M)129.40135.01140.80
Year 5 PV (M)124.48131.26138.34
PV of Terminal Value (M)2,167.372,285.462,408.65
Equity Value (M)2,818.142,957.173,101.89
Shares Outstanding (M)167.78167.78167.78
Fair Value$16.80$17.63$18.49
Upside / Downside-30.59%-27.17%-23.60%

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