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Dril-Quip, Inc. (DRQ)

Company Dividend Discount ModelIndustry: Oil & Gas Equipment & ServicesSector: Energy

Valuation Snapshot

Stable Growth$17.58 - $25.31$21.35
Multi-Stage$29.39 - $32.23$30.78
Blended Fair Value$26.07
Current Price$15.41
Upside69.16%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.00%0.00%1.250.000.000.000.000.000.000.000.000.00
YoY Growth--0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--8.12%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)148.87
(-) Cash Dividends Paid (M)74.98
(=) Cash Retained (M)73.88
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)29.7718.6111.16
Cash Retained (M)73.8873.8873.88
(-) Cash Required (M)-29.77-18.61-11.16
(=) Excess Retained (M)44.1155.2762.72
(/) Shares Outstanding (M)59.9259.9259.92
(=) Excess Retained per Share0.740.921.05
LTM Dividend per Share1.251.251.25
(+) Excess Retained per Share0.740.921.05
(=) Adjusted Dividend1.992.172.30
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$17.58$21.35$25.31
Upside / Downside14.08%38.56%64.25%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)148.87147.38145.90144.44143.00141.57145.82
Payout Ratio50.37%58.30%66.22%74.15%82.07%90.00%92.50%
Projected Dividends (M)74.9885.9196.62107.10117.37127.41134.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)77.9778.7679.56
Year 2 PV (M)79.5781.2082.85
Year 3 PV (M)80.0582.5285.05
Year 4 PV (M)79.6082.9086.30
Year 5 PV (M)78.4282.5186.76
PV of Terminal Value (M)1,365.441,436.541,510.58
Equity Value (M)1,761.051,844.441,931.09
Shares Outstanding (M)59.9259.9259.92
Fair Value$29.39$30.78$32.23
Upside / Downside90.73%99.76%109.15%

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