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Dolby Laboratories, Inc. (DLB)

Company Dividend Discount ModelIndustry: Information Technology ServicesSector: Technology

Valuation Snapshot

Stable Growth$27.48 - $43.66$34.84
Multi-Stage$36.08 - $39.48$37.75
Blended Fair Value$36.30
Current Price$79.91
Upside-54.58%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS7.40%11.93%1.301.181.071.030.920.910.800.680.590.50
YoY Growth--10.49%10.80%3.34%12.22%0.67%14.30%17.14%15.94%17.90%17.99%
Dividend Yield--0.00%1.50%1.24%1.46%1.04%0.96%1.17%1.12%0.95%1.10%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)255.02
(-) Cash Dividends Paid (M)126.60
(=) Cash Retained (M)128.42
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)51.0031.8819.13
Cash Retained (M)128.42128.42128.42
(-) Cash Required (M)-51.00-31.88-19.13
(=) Excess Retained (M)77.4296.54109.29
(/) Shares Outstanding (M)97.0997.0997.09
(=) Excess Retained per Share0.800.991.13
LTM Dividend per Share1.301.301.30
(+) Excess Retained per Share0.800.991.13
(=) Adjusted Dividend2.102.302.43
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.35%2.35%3.35%
Fair Value$27.48$34.84$43.66
Upside / Downside-65.62%-56.40%-45.36%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)255.02261.00267.13273.40279.82286.39294.98
Payout Ratio49.64%57.71%65.79%73.86%81.93%90.00%92.50%
Projected Dividends (M)126.60150.64175.73201.93229.25257.75272.86

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.35%2.35%3.35%
Year 1 PV (M)136.73138.08139.42
Year 2 PV (M)144.78147.65150.55
Year 3 PV (M)150.99155.51160.11
Year 4 PV (M)155.59161.83168.24
Year 5 PV (M)158.78166.77175.08
PV of Terminal Value (M)2,756.402,895.103,039.32
Equity Value (M)3,503.263,664.923,832.72
Shares Outstanding (M)97.0997.0997.09
Fair Value$36.08$37.75$39.48
Upside / Downside-54.85%-52.76%-50.60%

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