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Western Asset Premier Bond Fund (WEA)

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

Valuation Snapshot

Stable Growth$9.24 - $13.09$11.14
Multi-Stage$16.80 - $18.39$17.58
Blended Fair Value$14.36
Current Price$10.85
Upside32.35%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS1.28%-2.54%0.670.640.630.630.630.630.630.690.820.86
YoY Growth--4.48%1.52%0.37%-0.07%0.18%0.09%-9.06%-15.61%-5.03%-0.51%
Dividend Yield--6.24%5.98%5.95%4.41%4.46%4.30%5.21%5.01%6.34%7.11%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)21.12
(-) Cash Dividends Paid (M)16.93
(=) Cash Retained (M)4.19
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)4.222.641.58
Cash Retained (M)4.194.194.19
(-) Cash Required (M)-4.22-2.64-1.58
(=) Excess Retained (M)-0.031.552.61
(/) Shares Outstanding (M)14.8314.8314.83
(=) Excess Retained per Share0.000.100.18
LTM Dividend per Share1.141.141.14
(+) Excess Retained per Share0.000.100.18
(=) Adjusted Dividend1.141.251.32
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.88%-1.88%-0.88%
Fair Value$9.24$11.14$13.09
Upside / Downside-14.85%2.66%20.62%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)21.1220.7320.3419.9519.5819.2119.79
Payout Ratio80.16%82.13%84.09%86.06%88.03%90.00%92.50%
Projected Dividends (M)16.9317.0217.1017.1717.2417.2918.30

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.88%-1.88%-0.88%
Year 1 PV (M)15.4415.6015.76
Year 2 PV (M)14.0814.3714.66
Year 3 PV (M)12.8313.2313.63
Year 4 PV (M)11.6812.1712.67
Year 5 PV (M)10.6311.1911.77
PV of Terminal Value (M)184.52194.21204.31
Equity Value (M)249.17260.76272.81
Shares Outstanding (M)14.8314.8314.83
Fair Value$16.80$17.58$18.39
Upside / Downside54.83%62.04%69.53%

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