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First Trust Energy Income and Growth Fund (FEN)

Company Dividend Discount ModelIndustry: Asset Management - IncomeSector: Financial Services

Valuation Snapshot

Stable Growth$30.61 - $43.21$36.85
Multi-Stage$54.06 - $59.33$56.65
Blended Fair Value$46.75
Current Price$14.73
Upside217.37%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS0.00%-4.54%1.201.201.201.812.380.002.332.312.252.14
YoY Growth--0.04%-0.02%-33.68%-24.09%0.00%-100.00%0.90%2.69%5.12%11.96%
Dividend Yield--8.15%8.14%8.79%16.86%11.64%0.00%10.47%8.78%9.72%6.29%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)93.79
(-) Cash Dividends Paid (M)46.70
(=) Cash Retained (M)47.09
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)18.7611.727.03
Cash Retained (M)47.0947.0947.09
(-) Cash Required (M)-18.76-11.72-7.03
(=) Excess Retained (M)28.3335.3740.06
(/) Shares Outstanding (M)19.4619.4619.46
(=) Excess Retained per Share1.461.822.06
LTM Dividend per Share2.402.402.40
(+) Excess Retained per Share1.461.822.06
(=) Adjusted Dividend3.864.224.46
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-3.12%-2.12%-1.12%
Fair Value$30.61$36.85$43.21
Upside / Downside107.83%150.17%193.35%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)93.7991.8089.8687.9586.0984.2686.79
Payout Ratio49.79%57.83%65.88%73.92%81.96%90.00%92.50%
Projected Dividends (M)46.7053.0959.1965.0170.5575.8380.28

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-3.12%-2.12%-1.12%
Year 1 PV (M)48.1848.6749.17
Year 2 PV (M)48.7449.7550.77
Year 3 PV (M)48.5750.0951.64
Year 4 PV (M)47.8349.8451.90
Year 5 PV (M)46.6549.1151.67
PV of Terminal Value (M)812.22855.01899.59
Equity Value (M)1,052.191,102.471,154.75
Shares Outstanding (M)19.4619.4619.46
Fair Value$54.06$56.65$59.33
Upside / Downside267.03%284.57%302.81%

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