Definitive Analysis
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Westpac Banking Corporation (WBC.AX)

Company Dividend Discount ModelIndustry: Banks - DiversifiedSector: Financial Services

Valuation Snapshot

Stable Growth$195.31 - $728.72$585.29
Multi-Stage$94.02 - $102.70$98.28
Blended Fair Value$341.79
Current Price$38.97
Upside777.05%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS15.68%1.85%1.371.491.191.140.750.661.311.521.281.42
YoY Growth---7.73%25.49%3.85%52.39%13.03%-49.41%-13.73%19.22%-10.42%24.47%
Dividend Yield--3.53%4.70%5.61%5.54%2.89%3.94%4.43%5.53%4.00%4.83%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)13,898.00
(-) Cash Dividends Paid (M)10,346.17
(=) Cash Retained (M)3,551.83
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2,779.601,737.251,042.35
Cash Retained (M)3,551.833,551.833,551.83
(-) Cash Required (M)-2,779.60-1,737.25-1,042.35
(=) Excess Retained (M)772.231,814.582,509.48
(/) Shares Outstanding (M)3,792.913,792.913,792.91
(=) Excess Retained per Share0.200.480.66
LTM Dividend per Share2.732.732.73
(+) Excess Retained per Share0.200.480.66
(=) Adjusted Dividend2.933.213.39
WACC / Discount Rate7.08%7.08%7.08%
Growth Rate5.50%6.50%7.50%
Fair Value$195.31$585.29$728.72
Upside / Downside401.19%1,401.90%1,769.95%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)13,898.0014,801.3715,763.4616,788.0817,879.3119,041.4619,612.71
Payout Ratio74.44%77.55%80.67%83.78%86.89%90.00%92.50%
Projected Dividends (M)10,346.1711,479.1812,715.7814,064.6315,535.1017,137.3218,141.76

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate7.08%7.08%7.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)10,619.2010,719.8510,820.51
Year 2 PV (M)10,881.8911,089.1611,298.38
Year 3 PV (M)11,134.4911,454.1211,779.81
Year 4 PV (M)11,377.2411,814.7812,264.81
Year 5 PV (M)11,610.3812,171.1612,753.41
PV of Terminal Value (M)300,996.15315,534.37330,629.01
Equity Value (M)356,619.34372,783.45389,545.94
Shares Outstanding (M)3,792.913,792.913,792.91
Fair Value$94.02$98.28$102.70
Upside / Downside141.27%152.20%163.55%

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