Definitive Analysis
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Regions Financial Corporation (RF-PF)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$48.10 - $109.65$70.03
Multi-Stage$37.95 - $41.43$39.66
Blended Fair Value$54.84
Current Price$25.76
Upside112.90%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS9.05%13.68%0.980.870.730.670.650.630.500.380.350.33
YoY Growth--13.09%18.70%9.05%2.18%3.12%27.65%30.64%9.15%4.28%23.08%
Dividend Yield--3.90%3.46%2.91%2.67%2.61%2.53%1.99%1.52%1.39%1.34%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,156.00
(-) Cash Dividends Paid (M)905.00
(=) Cash Retained (M)1,251.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)431.20269.50161.70
Cash Retained (M)1,251.001,251.001,251.00
(-) Cash Required (M)-431.20-269.50-161.70
(=) Excess Retained (M)819.80981.501,089.30
(/) Shares Outstanding (M)909.00909.00909.00
(=) Excess Retained per Share0.901.081.20
LTM Dividend per Share1.001.001.00
(+) Excess Retained per Share0.901.081.20
(=) Adjusted Dividend1.902.082.19
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.96%5.96%6.96%
Fair Value$48.10$70.03$109.65
Upside / Downside86.74%171.85%325.65%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,156.002,284.452,420.562,564.772,717.572,879.482,965.87
Payout Ratio41.98%51.58%61.19%70.79%80.40%90.00%92.50%
Projected Dividends (M)905.001,178.341,481.031,815.612,184.802,591.532,743.43

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.96%5.96%6.96%
Year 1 PV (M)1,069.881,080.071,090.26
Year 2 PV (M)1,220.941,244.311,267.91
Year 3 PV (M)1,358.991,398.211,438.17
Year 4 PV (M)1,484.811,542.211,601.26
Year 5 PV (M)1,599.121,676.771,757.40
PV of Terminal Value (M)27,760.7329,108.6430,508.41
Equity Value (M)34,494.4736,050.2137,663.41
Shares Outstanding (M)909.00909.00909.00
Fair Value$37.95$39.66$41.43
Upside / Downside47.31%53.96%60.85%

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