Definitive Analysis
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AvalonBay Communities, Inc. (0HJO.L)

Company Dividend Discount ModelIndustry: Real Estate - GeneralSector: Real Estate

Valuation Snapshot

Stable Growth$109.38 - $191.01$144.24
Multi-Stage$125.68 - $137.07$131.27
Blended Fair Value$137.75
Current Price$193.17
Upside-28.69%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.76%4.94%6.736.456.226.216.185.875.635.405.084.58
YoY Growth--4.25%3.72%0.14%0.58%5.19%4.27%4.22%6.32%10.91%10.38%
Dividend Yield--3.13%3.56%3.70%2.50%3.35%3.99%2.81%3.29%2.77%2.41%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,168.66
(-) Cash Dividends Paid (M)984.66
(=) Cash Retained (M)184.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)233.73146.0887.65
Cash Retained (M)184.00184.00184.00
(-) Cash Required (M)-233.73-146.08-87.65
(=) Excess Retained (M)-49.7337.9296.35
(/) Shares Outstanding (M)143.00143.00143.00
(=) Excess Retained per Share-0.350.270.67
LTM Dividend per Share6.896.896.89
(+) Excess Retained per Share-0.350.270.67
(=) Adjusted Dividend6.547.157.56
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.94%3.94%4.94%
Fair Value$109.38$144.24$191.01
Upside / Downside-43.38%-25.33%-1.12%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,168.661,214.761,262.681,312.491,364.271,418.091,460.63
Payout Ratio84.26%85.40%86.55%87.70%88.85%90.00%92.50%
Projected Dividends (M)984.661,037.461,092.891,151.081,212.171,276.281,351.08

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.94%3.94%4.94%
Year 1 PV (M)941.79950.94960.09
Year 2 PV (M)900.63918.21935.96
Year 3 PV (M)861.12886.45912.29
Year 4 PV (M)823.19855.65889.05
Year 5 PV (M)786.81825.77866.27
PV of Terminal Value (M)13,658.9914,335.4215,038.39
Equity Value (M)17,972.5318,772.4519,602.05
Shares Outstanding (M)143.00143.00143.00
Fair Value$125.68$131.27$137.07
Upside / Downside-34.94%-32.04%-29.04%

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