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Invesco High Income Trust II (VLT)

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

Valuation Snapshot

Stable Growth$9.75 - $13.16$11.49
Multi-Stage$19.54 - $21.51$20.51
Blended Fair Value$16.00
Current Price$11.15
Upside43.51%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS-8.07%-6.76%0.800.760.760.841.001.221.281.271.341.44
YoY Growth--5.44%0.13%-9.55%-15.48%-18.65%-4.60%1.08%-5.05%-7.13%-11.06%
Dividend Yield--7.27%7.25%6.98%6.62%7.19%9.04%8.99%9.02%9.12%11.41%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)13.62
(-) Cash Dividends Paid (M)6.40
(=) Cash Retained (M)7.23
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2.721.701.02
Cash Retained (M)7.237.237.23
(-) Cash Required (M)-2.72-1.70-1.02
(=) Excess Retained (M)4.505.526.20
(/) Shares Outstanding (M)6.496.496.49
(=) Excess Retained per Share0.690.850.96
LTM Dividend per Share0.990.990.99
(+) Excess Retained per Share0.690.850.96
(=) Adjusted Dividend1.681.841.94
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-6.95%-5.95%-4.95%
Fair Value$9.75$11.49$13.16
Upside / Downside-12.57%3.09%17.98%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)13.6212.8112.0511.3310.6610.0210.32
Payout Ratio46.97%55.57%64.18%72.79%81.39%90.00%92.50%
Projected Dividends (M)6.407.127.738.258.679.029.55

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-6.95%-5.95%-4.95%
Year 1 PV (M)6.466.536.60
Year 2 PV (M)6.366.506.64
Year 3 PV (M)6.156.366.56
Year 4 PV (M)5.876.136.39
Year 5 PV (M)5.545.846.16
PV of Terminal Value (M)96.41101.71107.23
Equity Value (M)126.80133.06139.58
Shares Outstanding (M)6.496.496.49
Fair Value$19.54$20.51$21.51
Upside / Downside75.28%83.93%92.95%

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