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Franklin Universal Trust (FT)

Company Dividend Discount ModelIndustry: Asset ManagementSector: Financial Services

Valuation Snapshot

Stable Growth$38.67 - $92.69$57.25
Multi-Stage$29.75 - $32.45$31.07
Blended Fair Value$44.16
Current Price$7.64
Upside478.02%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS5.84%0.80%0.510.570.590.420.390.380.380.380.470.47
YoY Growth---10.71%-3.46%42.41%7.84%0.34%0.00%0.00%-18.99%0.00%0.64%
Dividend Yield--7.01%8.45%7.40%4.84%5.50%5.21%5.67%5.30%6.93%7.81%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)45.44
(-) Cash Dividends Paid (M)25.63
(=) Cash Retained (M)19.80
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)9.095.683.41
Cash Retained (M)19.8019.8019.80
(-) Cash Required (M)-9.09-5.68-3.41
(=) Excess Retained (M)10.7214.1216.40
(/) Shares Outstanding (M)25.1325.1325.13
(=) Excess Retained per Share0.430.560.65
LTM Dividend per Share1.021.021.02
(+) Excess Retained per Share0.430.560.65
(=) Adjusted Dividend1.451.581.67
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.15%6.15%7.15%
Fair Value$38.67$57.25$92.69
Upside / Downside406.10%649.32%1,113.22%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)45.4448.2351.2054.3457.6861.2363.07
Payout Ratio56.42%63.13%69.85%76.57%83.28%90.00%92.50%
Projected Dividends (M)25.6330.4535.7641.6148.0455.1158.34

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.15%6.15%7.15%
Year 1 PV (M)27.6527.9228.18
Year 2 PV (M)29.4930.0530.62
Year 3 PV (M)31.1632.0632.97
Year 4 PV (M)32.6733.9335.23
Year 5 PV (M)34.0335.6837.40
PV of Terminal Value (M)592.58621.30651.12
Equity Value (M)747.59780.94815.52
Shares Outstanding (M)25.1325.1325.13
Fair Value$29.75$31.07$32.45
Upside / Downside289.35%306.73%324.73%

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