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KB Home (KBH)

Company Dividend Discount ModelIndustry: Residential ConstructionSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$168.74 - $447.62$258.02
Multi-Stage$114.07 - $124.71$119.29
Blended Fair Value$188.66
Current Price$63.55
Upside196.86%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS28.57%23.06%0.990.790.730.750.530.280.120.120.120.13
YoY Growth--25.91%8.35%-2.96%42.00%86.87%129.08%2.89%0.65%-6.53%2.27%
Dividend Yield--1.63%1.19%2.07%1.94%1.31%0.87%0.54%0.43%0.67%1.05%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)517.87
(-) Cash Dividends Paid (M)70.82
(=) Cash Retained (M)447.05
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)103.5764.7338.84
Cash Retained (M)447.05447.05447.05
(-) Cash Required (M)-103.57-64.73-38.84
(=) Excess Retained (M)343.48382.32408.21
(/) Shares Outstanding (M)71.9971.9971.99
(=) Excess Retained per Share4.775.315.67
LTM Dividend per Share0.980.980.98
(+) Excess Retained per Share4.775.315.67
(=) Adjusted Dividend5.756.296.65
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$168.74$258.02$447.62
Upside / Downside165.52%306.01%604.36%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)517.87551.53587.38625.56666.23709.53730.82
Payout Ratio13.68%28.94%44.21%59.47%74.74%90.00%92.50%
Projected Dividends (M)70.82159.62259.66372.03497.91638.58676.01

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)144.93146.31147.68
Year 2 PV (M)214.08218.15222.27
Year 3 PV (M)278.50286.50294.64
Year 4 PV (M)338.45351.46364.85
Year 5 PV (M)394.13413.17432.94
PV of Terminal Value (M)6,842.167,172.647,515.76
Equity Value (M)8,212.258,588.238,978.15
Shares Outstanding (M)71.9971.9971.99
Fair Value$114.07$119.29$124.71
Upside / Downside79.50%87.72%96.24%

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