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Webster Financial Corporation (WBS)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$129.48 - $343.47$197.99
Multi-Stage$89.14 - $97.36$93.17
Blended Fair Value$145.58
Current Price$59.44
Upside144.92%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS14.29%15.07%1.641.661.480.860.870.840.690.560.530.48
YoY Growth---1.30%12.26%71.10%-0.11%2.97%22.46%21.48%5.71%10.57%20.07%
Dividend Yield--3.18%3.35%3.75%1.54%1.57%3.67%1.30%1.02%1.07%1.35%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)924.75
(-) Cash Dividends Paid (M)270.15
(=) Cash Retained (M)654.60
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)184.95115.5969.36
Cash Retained (M)654.60654.60654.60
(-) Cash Required (M)-184.95-115.59-69.36
(=) Excess Retained (M)469.65539.00585.24
(/) Shares Outstanding (M)167.53167.53167.53
(=) Excess Retained per Share2.803.223.49
LTM Dividend per Share1.611.611.61
(+) Excess Retained per Share2.803.223.49
(=) Adjusted Dividend4.424.835.11
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$129.48$197.99$343.47
Upside / Downside117.83%233.09%477.85%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)924.75984.861,048.871,117.051,189.661,266.981,304.99
Payout Ratio29.21%41.37%53.53%65.69%77.84%90.00%92.50%
Projected Dividends (M)270.15407.44561.44733.74926.061,140.291,207.12

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)369.96373.46376.97
Year 2 PV (M)462.89471.70480.60
Year 3 PV (M)549.29565.05581.12
Year 4 PV (M)629.48653.69678.59
Year 5 PV (M)703.79737.79773.08
PV of Terminal Value (M)12,217.8112,807.9313,420.64
Equity Value (M)14,933.2115,609.6316,311.01
Shares Outstanding (M)167.53167.53167.53
Fair Value$89.14$93.17$97.36
Upside / Downside49.96%56.75%63.79%

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