Definitive Analysis
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SM Energy Company (0KZA.L)

Company Dividend Discount ModelIndustry: Oil & Gas EnergySector: Energy

Valuation Snapshot

Stable Growth$148.30 - $393.40$226.77
Multi-Stage$99.75 - $109.08$104.33
Blended Fair Value$165.55
Current Price$24.97
Upside563.00%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS49.85%28.88%0.740.620.170.020.020.100.100.100.070.06
YoY Growth--18.72%264.69%720.60%5.14%-79.78%0.56%0.42%43.77%14.46%0.73%
Dividend Yield--2.47%1.23%0.61%0.05%0.12%8.02%1.10%1.07%0.56%0.63%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)727.30
(-) Cash Dividends Paid (M)68.67
(=) Cash Retained (M)658.63
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)145.4690.9154.55
Cash Retained (M)658.63658.63658.63
(-) Cash Required (M)-145.46-90.91-54.55
(=) Excess Retained (M)513.17567.72604.08
(/) Shares Outstanding (M)115.04115.04115.04
(=) Excess Retained per Share4.464.935.25
LTM Dividend per Share0.600.600.60
(+) Excess Retained per Share4.464.935.25
(=) Adjusted Dividend5.065.535.85
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$148.30$226.77$393.40
Upside / Downside493.92%808.16%1,475.50%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)727.30774.57824.92878.54935.65996.461,026.36
Payout Ratio9.44%25.55%41.66%57.78%73.89%90.00%92.50%
Projected Dividends (M)68.67197.93343.70507.59691.33896.82949.38

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)179.72181.42183.13
Year 2 PV (M)283.37288.77294.22
Year 3 PV (M)379.99390.90402.01
Year 4 PV (M)469.93488.00506.59
Year 5 PV (M)553.52580.26608.02
PV of Terminal Value (M)9,609.1210,073.2410,555.13
Equity Value (M)11,475.6512,002.5912,549.09
Shares Outstanding (M)115.04115.04115.04
Fair Value$99.75$104.33$109.08
Upside / Downside299.49%317.84%336.86%

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