Definitive Analysis
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Definitive Analysis

Financial Statements

Mode

Ticker

Industry

Sector

Westinghouse Air Brake Technologies Corporation (WAB)

Company Dividend Discount ModelIndustry: RailroadsSector: Industrials

Valuation Snapshot

Stable Growth$150.33 - $367.10$223.93
Multi-Stage$104.17 - $113.86$108.92
Blended Fair Value$166.42
Current Price$200.47
Upside-16.98%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.37%21.95%0.820.720.650.540.540.480.270.250.190.16
YoY Growth--13.82%10.81%20.65%-0.54%13.22%76.55%9.61%30.18%20.28%40.10%
Dividend Yield--0.45%0.50%0.64%0.56%0.68%0.99%0.36%0.30%0.24%0.20%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,180.00
(-) Cash Dividends Paid (M)164.00
(=) Cash Retained (M)1,016.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)236.00147.5088.50
Cash Retained (M)1,016.001,016.001,016.00
(-) Cash Required (M)-236.00-147.50-88.50
(=) Excess Retained (M)780.00868.50927.50
(/) Shares Outstanding (M)171.43171.43171.43
(=) Excess Retained per Share4.555.075.41
LTM Dividend per Share0.960.960.96
(+) Excess Retained per Share4.555.075.41
(=) Adjusted Dividend5.516.026.37
WACC / Discount Rate9.36%9.36%9.36%
Growth Rate5.50%6.50%7.50%
Fair Value$150.33$223.93$367.10
Upside / Downside-25.01%11.70%83.12%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,180.001,256.701,338.391,425.381,518.031,616.701,665.20
Payout Ratio13.90%29.12%44.34%59.56%74.78%90.00%92.50%
Projected Dividends (M)164.00365.93593.43848.951,135.181,455.031,540.31

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.36%9.36%9.36%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)331.46334.60337.74
Year 2 PV (M)486.88496.15505.51
Year 3 PV (M)630.90649.01667.46
Year 4 PV (M)764.13793.52823.74
Year 5 PV (M)887.16930.01974.50
PV of Terminal Value (M)14,756.0715,468.7916,208.80
Equity Value (M)17,856.6018,672.0919,517.76
Shares Outstanding (M)171.43171.43171.43
Fair Value$104.17$108.92$113.86
Upside / Downside-48.04%-45.67%-43.21%

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