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California Water Service Group (CWT)

Company Dividend Discount ModelIndustry: Regulated WaterSector: Utilities

Valuation Snapshot

Stable Growth$53.89 - $142.96$82.41
Multi-Stage$38.13 - $41.60$39.83
Blended Fair Value$61.12
Current Price$45.89
Upside33.19%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.48%7.74%1.100.990.910.800.700.640.610.580.560.54
YoY Growth--10.88%8.95%14.32%13.48%9.85%5.49%4.28%4.48%3.17%3.23%
Dividend Yield--2.28%2.14%1.57%1.35%1.25%1.27%1.15%1.56%1.55%2.02%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)136.39
(-) Cash Dividends Paid (M)72.63
(=) Cash Retained (M)63.76
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)27.2817.0510.23
Cash Retained (M)63.7663.7663.76
(-) Cash Required (M)-27.28-17.05-10.23
(=) Excess Retained (M)36.4846.7153.53
(/) Shares Outstanding (M)59.3659.3659.36
(=) Excess Retained per Share0.610.790.90
LTM Dividend per Share1.221.221.22
(+) Excess Retained per Share0.610.790.90
(=) Adjusted Dividend1.842.012.13
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$53.89$82.41$142.96
Upside / Downside17.44%79.58%211.54%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)136.39145.25154.69164.75175.46186.86192.47
Payout Ratio53.25%60.60%67.95%75.30%82.65%90.00%92.50%
Projected Dividends (M)72.6388.02105.12124.06145.02168.18178.03

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)79.9380.6881.44
Year 2 PV (M)86.6688.3289.98
Year 3 PV (M)92.8795.5498.25
Year 4 PV (M)98.57102.36106.26
Year 5 PV (M)103.80108.81114.02
PV of Terminal Value (M)1,801.961,889.001,979.37
Equity Value (M)2,263.802,364.712,469.33
Shares Outstanding (M)59.3659.3659.36
Fair Value$38.13$39.83$41.60
Upside / Downside-16.90%-13.20%-9.36%

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