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W.W. Grainger, Inc. (0IZI.L)

Company Dividend Discount ModelIndustry: Industrial - DistributionSector: Industrials

Valuation Snapshot

Stable Growth$538.95 - $997.37$727.20
Multi-Stage$529.19 - $578.89$553.58
Blended Fair Value$640.39
Current Price$948.91
Upside-32.51%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS5.12%3.88%8.728.127.667.397.006.796.546.296.276.35
YoY Growth--7.40%5.95%3.64%5.62%3.05%3.80%3.95%0.34%-1.14%6.52%
Dividend Yield--0.89%0.81%1.13%1.41%1.76%2.88%2.13%2.27%3.43%3.47%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,730.00
(-) Cash Dividends Paid (M)458.00
(=) Cash Retained (M)1,272.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)346.00216.25129.75
Cash Retained (M)1,272.001,272.001,272.00
(-) Cash Required (M)-346.00-216.25-129.75
(=) Excess Retained (M)926.001,055.751,142.25
(/) Shares Outstanding (M)48.3048.3048.30
(=) Excess Retained per Share19.1721.8623.65
LTM Dividend per Share9.489.489.48
(+) Excess Retained per Share19.1721.8623.65
(=) Adjusted Dividend28.6531.3433.13
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.59%4.59%5.59%
Fair Value$538.95$727.20$997.37
Upside / Downside-43.20%-23.36%5.11%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,730.001,809.411,892.471,979.352,070.212,165.242,230.19
Payout Ratio26.47%39.18%51.88%64.59%77.29%90.00%92.50%
Projected Dividends (M)458.00708.91981.901,278.451,600.161,948.712,062.93

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.59%4.59%5.59%
Year 1 PV (M)643.58649.80656.01
Year 2 PV (M)809.26824.96840.81
Year 3 PV (M)956.57984.541,013.05
Year 4 PV (M)1,086.941,129.531,173.35
Year 5 PV (M)1,201.721,260.851,322.29
PV of Terminal Value (M)20,861.7821,888.3422,954.93
Equity Value (M)25,559.8526,738.0227,960.44
Shares Outstanding (M)48.3048.3048.30
Fair Value$529.19$553.58$578.89
Upside / Downside-44.23%-41.66%-38.99%

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