Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Humana Inc. (HUM)

Company Dividend Discount ModelIndustry: Medical - Healthcare PlansSector: Healthcare

Valuation Snapshot

Stable Growth$291.56 - $971.17$475.61
Multi-Stage$190.24 - $207.84$198.88
Blended Fair Value$337.25
Current Price$260.17
Upside29.63%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.17%9.62%3.573.573.252.932.672.412.191.821.471.42
YoY Growth--0.00%9.95%10.73%9.60%11.00%9.81%20.45%24.29%2.91%0.00%
Dividend Yield--1.35%1.02%0.67%0.67%0.64%0.77%0.82%0.68%0.71%0.78%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,291.00
(-) Cash Dividends Paid (M)429.00
(=) Cash Retained (M)862.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)258.20161.3896.83
Cash Retained (M)862.00862.00862.00
(-) Cash Required (M)-258.20-161.38-96.83
(=) Excess Retained (M)603.80700.63765.18
(/) Shares Outstanding (M)120.76120.76120.76
(=) Excess Retained per Share5.005.806.34
LTM Dividend per Share3.553.553.55
(+) Excess Retained per Share5.005.806.34
(=) Adjusted Dividend8.559.359.89
WACC / Discount Rate8.59%8.59%8.59%
Growth Rate5.50%6.50%7.50%
Fair Value$291.56$475.61$971.17
Upside / Downside12.07%82.81%273.28%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,291.001,374.921,464.281,559.461,660.831,768.781,821.85
Payout Ratio33.23%44.58%55.94%67.29%78.65%90.00%92.50%
Projected Dividends (M)429.00612.99819.091,049.391,306.181,591.901,685.21

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.59%8.59%8.59%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)559.18564.48569.78
Year 2 PV (M)681.59694.57707.68
Year 3 PV (M)796.57819.43842.73
Year 4 PV (M)904.44939.22975.00
Year 5 PV (M)1,005.521,054.091,104.51
PV of Terminal Value (M)19,026.5319,945.5220,899.68
Equity Value (M)22,973.8224,017.3125,099.38
Shares Outstanding (M)120.76120.76120.76
Fair Value$190.24$198.88$207.84
Upside / Downside-26.88%-23.56%-20.11%

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