Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

The Interpublic Group of Companies, Inc. (IPG)

Company Dividend Discount ModelIndustry: Advertising AgenciesSector: Communication Services

Valuation Snapshot

Stable Growth$18.24 - $30.87$23.75
Multi-Stage$25.50 - $27.86$26.66
Blended Fair Value$25.20
Current Price$24.48
Upside2.96%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.46%12.06%1.331.291.231.151.070.970.860.750.640.52
YoY Growth--3.63%4.77%6.92%7.44%9.64%12.73%14.91%17.58%21.94%22.96%
Dividend Yield--4.90%3.96%3.29%3.24%3.66%6.02%4.08%3.27%2.60%2.29%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)551.60
(-) Cash Dividends Paid (M)489.40
(=) Cash Retained (M)62.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)110.3268.9541.37
Cash Retained (M)62.2062.2062.20
(-) Cash Required (M)-110.32-68.95-41.37
(=) Excess Retained (M)-48.12-6.7520.83
(/) Shares Outstanding (M)372.70372.70372.70
(=) Excess Retained per Share-0.13-0.020.06
LTM Dividend per Share1.311.311.31
(+) Excess Retained per Share-0.13-0.020.06
(=) Adjusted Dividend1.181.301.37
WACC / Discount Rate8.15%8.15%8.15%
Growth Rate1.56%2.56%3.56%
Fair Value$18.24$23.75$30.87
Upside / Downside-25.49%-2.98%26.11%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)551.60565.71580.18595.02610.25625.86644.63
Payout Ratio88.72%88.98%89.23%89.49%89.74%90.00%92.50%
Projected Dividends (M)489.40503.36517.72532.48547.66563.27596.29

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.15%8.15%8.15%
Growth Rate1.56%2.56%3.56%
Year 1 PV (M)460.89465.43469.97
Year 2 PV (M)434.04442.63451.30
Year 3 PV (M)408.75420.94433.38
Year 4 PV (M)384.93400.32416.16
Year 5 PV (M)362.50380.70399.62
PV of Terminal Value (M)7,450.927,825.048,214.05
Equity Value (M)9,502.029,935.0610,384.48
Shares Outstanding (M)372.70372.70372.70
Fair Value$25.50$26.66$27.86
Upside / Downside4.15%8.89%13.82%

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