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Summit Midstream Partners, LP (SMLP)

Company Dividend Discount ModelIndustry: Oil & Gas MidstreamSector: Energy

Valuation Snapshot

Stable Growth$51.76 - $70.55$61.31
Multi-Stage$94.20 - $103.98$98.99
Blended Fair Value$80.15
Current Price$28.50
Upside181.24%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS-49.44%-22.96%0.620.310.000.0014.1818.7216.1014.8513.5211.16
YoY Growth--99.94%0.00%0.00%-100.00%-24.27%16.31%8.44%9.81%21.15%32.88%
Dividend Yield--2.17%2.02%0.00%0.00%154.95%12.56%7.64%4.12%5.31%2.31%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)108.14
(-) Cash Dividends Paid (M)6.51
(=) Cash Retained (M)101.63
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)21.6313.528.11
Cash Retained (M)101.63101.63101.63
(-) Cash Required (M)-21.63-13.52-8.11
(=) Excess Retained (M)80.0088.1193.52
(/) Shares Outstanding (M)10.5310.5310.53
(=) Excess Retained per Share7.608.378.89
LTM Dividend per Share0.620.620.62
(+) Excess Retained per Share7.608.378.89
(=) Adjusted Dividend8.228.999.50
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-5.85%-4.85%-3.85%
Fair Value$51.76$61.31$70.55
Upside / Downside81.61%115.13%147.56%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)108.14102.8997.9093.1588.6384.3386.86
Payout Ratio6.02%22.82%39.61%56.41%73.20%90.00%92.50%
Projected Dividends (M)6.5123.4838.7852.5464.8875.8980.34

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-5.85%-4.85%-3.85%
Year 1 PV (M)21.2921.5221.75
Year 2 PV (M)31.9032.5833.27
Year 3 PV (M)39.2040.4641.75
Year 4 PV (M)43.9045.8047.75
Year 5 PV (M)46.5849.1051.74
PV of Terminal Value (M)808.59852.45898.20
Equity Value (M)991.461,041.921,094.47
Shares Outstanding (M)10.5310.5310.53
Fair Value$94.20$98.99$103.98
Upside / Downside230.52%247.34%264.86%

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