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H&E Equipment Services, Inc. (HEES)

Company Dividend Discount ModelIndustry: Rental & Leasing ServicesSector: Industrials

Valuation Snapshot

Stable Growth$22.96 - $35.14$28.65
Multi-Stage$32.55 - $35.64$34.07
Blended Fair Value$31.36
Current Price$94.79
Upside-66.92%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.41%8.18%1.101.101.091.091.091.081.081.071.071.02
YoY Growth--0.42%0.46%0.27%0.39%0.53%0.29%0.26%0.27%5.26%102.53%
Dividend Yield--1.16%1.74%2.47%2.51%2.86%7.36%4.10%2.79%4.37%5.81%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)90.89
(-) Cash Dividends Paid (M)40.25
(=) Cash Retained (M)50.64
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)18.1811.366.82
Cash Retained (M)50.6450.6450.64
(-) Cash Required (M)-18.18-11.36-6.82
(=) Excess Retained (M)32.4639.2843.82
(/) Shares Outstanding (M)36.4536.4536.45
(=) Excess Retained per Share0.891.081.20
LTM Dividend per Share1.101.101.10
(+) Excess Retained per Share0.891.081.20
(=) Adjusted Dividend1.992.182.31
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.38%1.38%2.38%
Fair Value$22.96$28.65$35.14
Upside / Downside-75.78%-69.77%-62.93%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)90.8992.1493.4194.7096.0097.33100.25
Payout Ratio44.29%53.43%62.57%71.71%80.86%90.00%92.50%
Projected Dividends (M)40.2549.2358.4567.9177.6387.5992.73

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.38%1.38%2.38%
Year 1 PV (M)44.6845.1245.57
Year 2 PV (M)48.1449.1150.08
Year 3 PV (M)50.7752.3053.86
Year 4 PV (M)52.6654.7956.99
Year 5 PV (M)53.9356.6859.53
PV of Terminal Value (M)936.31983.881,033.38
Equity Value (M)1,186.491,241.881,299.40
Shares Outstanding (M)36.4536.4536.45
Fair Value$32.55$34.07$35.64
Upside / Downside-65.66%-64.06%-62.40%

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