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Ross Stores, Inc. (ROST)

Company Dividend Discount ModelIndustry: Apparel - RetailSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$98.83 - $185.76$134.16
Multi-Stage$94.79 - $103.69$99.16
Blended Fair Value$116.66
Current Price$158.92
Upside-26.59%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS5.74%11.24%1.501.391.321.240.311.131.030.760.660.59
YoY Growth--7.46%5.45%6.46%299.51%-72.58%9.67%36.22%15.32%11.61%14.16%
Dividend Yield--1.07%1.06%1.24%1.24%0.24%1.27%1.06%0.94%1.01%1.04%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,085.96
(-) Cash Dividends Paid (M)518.42
(=) Cash Retained (M)1,567.54
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)417.19260.75156.45
Cash Retained (M)1,567.541,567.541,567.54
(-) Cash Required (M)-417.19-260.75-156.45
(=) Excess Retained (M)1,150.351,306.791,411.09
(/) Shares Outstanding (M)326.62326.62326.62
(=) Excess Retained per Share3.524.004.32
LTM Dividend per Share1.591.591.59
(+) Excess Retained per Share3.524.004.32
(=) Adjusted Dividend5.115.595.91
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.74%4.74%5.74%
Fair Value$98.83$134.16$185.76
Upside / Downside-37.81%-15.58%16.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,085.962,184.742,288.202,396.552,510.042,628.902,707.77
Payout Ratio24.85%37.88%50.91%63.94%76.97%90.00%92.50%
Projected Dividends (M)518.42827.631,164.961,532.381,931.992,366.012,504.69

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.74%4.74%5.74%
Year 1 PV (M)751.37758.61765.86
Year 2 PV (M)960.16978.76997.54
Year 3 PV (M)1,146.621,180.101,214.22
Year 4 PV (M)1,312.421,363.761,416.60
Year 5 PV (M)1,459.151,530.851,605.34
PV of Terminal Value (M)25,330.8326,575.5327,868.69
Equity Value (M)30,960.5532,387.6233,868.25
Shares Outstanding (M)326.62326.62326.62
Fair Value$94.79$99.16$103.69
Upside / Downside-40.35%-37.60%-34.75%

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