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Kontoor Brands, Inc. (KTB)

Company Dividend Discount ModelIndustry: Apparel - ManufacturersSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$28.75 - $41.77$35.06
Multi-Stage$46.96 - $51.47$49.17
Blended Fair Value$42.12
Current Price$80.52
Upside-47.69%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202420232022202120202019201820172016
DPS12.01%0.00%2.001.941.851.700.981.130.000.000.000.00
YoY Growth--3.21%4.74%9.02%73.61%-13.83%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--3.14%3.22%3.82%4.10%2.01%5.59%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)217.67
(-) Cash Dividends Paid (M)115.37
(=) Cash Retained (M)102.30
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)43.5327.2116.33
Cash Retained (M)102.30102.30102.30
(-) Cash Required (M)-43.53-27.21-16.33
(=) Excess Retained (M)58.7775.0985.98
(/) Shares Outstanding (M)56.0356.0356.03
(=) Excess Retained per Share1.051.341.53
LTM Dividend per Share2.062.062.06
(+) Excess Retained per Share1.051.341.53
(=) Adjusted Dividend3.113.403.59
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.54%-0.54%0.46%
Fair Value$28.75$35.06$41.77
Upside / Downside-64.29%-56.45%-48.12%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)217.67216.49215.31214.14212.98211.82218.18
Payout Ratio53.00%60.40%67.80%75.20%82.60%90.00%92.50%
Projected Dividends (M)115.37130.76145.99161.04175.92190.64201.82

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.54%-0.54%0.46%
Year 1 PV (M)118.65119.86121.06
Year 2 PV (M)120.20122.65125.13
Year 3 PV (M)120.31124.02127.80
Year 4 PV (M)119.26124.18129.25
Year 5 PV (M)117.27123.35129.68
PV of Terminal Value (M)2,035.822,141.332,251.16
Equity Value (M)2,631.522,755.382,884.08
Shares Outstanding (M)56.0356.0356.03
Fair Value$46.96$49.17$51.47
Upside / Downside-41.68%-38.93%-36.08%

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