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ADT Inc. (ADT)

Company Dividend Discount ModelIndustry: Security & Protection ServicesSector: Industrials

Valuation Snapshot

Stable Growth$4.95 - $7.13$6.01
Multi-Stage$8.04 - $8.83$8.42
Blended Fair Value$7.22
Current Price$8.71
Upside-17.11%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-20.24%0.00%0.200.140.140.130.120.620.090.820.000.00
YoY Growth--41.75%1.15%9.26%6.42%-80.64%610.94%-89.41%0.00%0.00%0.00%
Dividend Yield--2.45%2.17%1.92%1.68%1.42%14.31%1.33%10.35%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)640.56
(-) Cash Dividends Paid (M)191.85
(=) Cash Retained (M)448.71
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)128.1180.0748.04
Cash Retained (M)448.71448.71448.71
(-) Cash Required (M)-128.11-80.07-48.04
(=) Excess Retained (M)320.59368.64400.66
(/) Shares Outstanding (M)913.55913.55913.55
(=) Excess Retained per Share0.350.400.44
LTM Dividend per Share0.210.210.21
(+) Excess Retained per Share0.350.400.44
(=) Adjusted Dividend0.560.610.65
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$4.95$6.01$7.13
Upside / Downside-43.13%-30.94%-18.15%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)640.56634.15627.81621.53615.32609.16627.44
Payout Ratio29.95%41.96%53.97%65.98%77.99%90.00%92.50%
Projected Dividends (M)191.85266.09338.83410.09479.89548.25580.38

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)241.44243.90246.37
Year 2 PV (M)278.95284.68290.46
Year 3 PV (M)306.34315.81325.48
Year 4 PV (M)325.26338.74352.64
Year 5 PV (M)337.17354.73373.01
PV of Terminal Value (M)5,853.236,158.026,475.38
Equity Value (M)7,342.407,695.888,063.33
Shares Outstanding (M)913.55913.55913.55
Fair Value$8.04$8.42$8.83
Upside / Downside-7.72%-3.28%1.34%

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