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Entergy Arkansas, Inc. 1M BD 4.875%66 (EAI)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$173.98 - $461.53$266.04
Multi-Stage$117.07 - $128.01$122.44
Blended Fair Value$194.24
Current Price$21.17
Upside817.53%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS21.94%33.79%1.231.660.340.200.380.460.370.070.030.03
YoY Growth---25.66%384.88%72.00%-47.37%-17.39%23.18%468.28%147.75%-3.52%-59.27%
Dividend Yield--5.92%7.29%1.52%0.79%1.48%1.85%1.49%0.27%0.12%0.04%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,867.42
(-) Cash Dividends Paid (M)181.34
(=) Cash Retained (M)1,686.08
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)373.48233.43140.06
Cash Retained (M)1,686.081,686.081,686.08
(-) Cash Required (M)-373.48-233.43-140.06
(=) Excess Retained (M)1,312.601,452.651,546.02
(/) Shares Outstanding (M)251.77251.77251.77
(=) Excess Retained per Share5.215.776.14
LTM Dividend per Share0.720.720.72
(+) Excess Retained per Share5.215.776.14
(=) Adjusted Dividend5.936.496.86
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$173.98$266.04$461.53
Upside / Downside721.84%1,156.69%2,080.13%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,867.421,988.802,118.072,255.752,402.372,558.522,635.28
Payout Ratio9.71%25.77%41.83%57.88%73.94%90.00%92.50%
Projected Dividends (M)181.34512.48885.911,305.721,776.362,302.672,437.63

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)465.34469.75474.16
Year 2 PV (M)730.40744.32758.36
Year 3 PV (M)977.481,005.541,034.13
Year 4 PV (M)1,207.471,253.911,301.67
Year 5 PV (M)1,421.221,489.871,561.14
PV of Terminal Value (M)24,672.4025,864.0927,101.38
Equity Value (M)29,474.3230,827.4732,230.84
Shares Outstanding (M)251.77251.77251.77
Fair Value$117.07$122.44$128.01
Upside / Downside452.98%478.37%504.70%

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