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American Funds Retirement Income Portfolio - Moderate Class F-1 (FBFWX)

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

Valuation Snapshot

Stable Growth$14.81 - $22.78$18.52
Multi-Stage$21.69 - $23.70$22.67
Blended Fair Value$20.60
Current Price$13.38
Upside53.93%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.08%2.08%1.201.201.010.200.301.201.351.191.191.19
YoY Growth--0.04%19.34%398.51%-32.38%-75.05%-11.68%13.46%0.02%0.15%21.93%
Dividend Yield--9.42%9.92%8.83%1.60%2.41%11.43%12.08%10.84%11.05%11.58%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3,151.00
(-) Cash Dividends Paid (M)2,513.54
(=) Cash Retained (M)637.46
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)630.20393.88236.33
Cash Retained (M)637.46637.46637.46
(-) Cash Required (M)-630.20-393.88-236.33
(=) Excess Retained (M)7.26243.59401.14
(/) Shares Outstanding (M)1,997.751,997.751,997.75
(=) Excess Retained per Share0.000.120.20
LTM Dividend per Share1.261.261.26
(+) Excess Retained per Share0.000.120.20
(=) Adjusted Dividend1.261.381.46
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.53%1.53%2.53%
Fair Value$14.81$18.52$22.78
Upside / Downside10.67%38.40%70.25%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3,151.003,199.253,248.233,297.973,348.463,399.733,501.73
Payout Ratio79.77%81.82%83.86%85.91%87.95%90.00%92.50%
Projected Dividends (M)2,513.542,617.482,724.022,833.212,945.103,059.763,239.10

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.53%1.53%2.53%
Year 1 PV (M)2,375.572,399.202,422.83
Year 2 PV (M)2,243.782,288.642,333.94
Year 3 PV (M)2,118.032,181.872,246.97
Year 4 PV (M)1,998.202,078.902,162.02
Year 5 PV (M)1,884.131,979.722,079.15
PV of Terminal Value (M)32,708.4034,367.8636,094.01
Equity Value (M)43,328.1145,296.1947,338.93
Shares Outstanding (M)1,997.751,997.751,997.75
Fair Value$21.69$22.67$23.70
Upside / Downside62.10%69.46%77.10%

High-Yield Dividend Screener

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QCOMQUALCOMM Incorporated1.99%$3.4468.67%
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CNMDCONMED Corporation1.97%$0.8038.60%
FBINFortune Brands Innovations, Inc.1.97%$1.0036.69%
FEIMFrequency Electronics, Inc.1.97%$1.0046.25%
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