Definitive Analysis
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Avangrid, Inc. (AGR)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$39.87 - $70.52$52.84
Multi-Stage$43.64 - $47.66$45.61
Blended Fair Value$49.23
Current Price$35.79
Upside37.54%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS4.87%22.76%1.761.761.581.411.411.391.381.040.000.25
YoY Growth--0.00%11.09%12.48%0.00%1.49%0.37%33.42%0.00%-100.00%11.54%
Dividend Yield--4.88%4.41%3.39%2.82%3.21%2.77%2.70%2.42%0.00%0.70%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,122.00
(-) Cash Dividends Paid (M)681.00
(=) Cash Retained (M)441.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)224.40140.2584.15
Cash Retained (M)441.00441.00441.00
(-) Cash Required (M)-224.40-140.25-84.15
(=) Excess Retained (M)216.60300.75356.85
(/) Shares Outstanding (M)387.33387.33387.33
(=) Excess Retained per Share0.560.780.92
LTM Dividend per Share1.761.761.76
(+) Excess Retained per Share0.560.780.92
(=) Adjusted Dividend2.322.532.68
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.10%4.10%5.10%
Fair Value$39.87$52.84$70.52
Upside / Downside11.39%47.65%97.05%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,122.001,168.051,216.001,265.911,317.871,371.961,413.12
Payout Ratio60.70%66.56%72.42%78.28%84.14%90.00%92.50%
Projected Dividends (M)681.00777.41880.59990.931,108.841,234.761,307.14

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.10%4.10%5.10%
Year 1 PV (M)705.74712.58719.43
Year 2 PV (M)725.70739.84754.13
Year 3 PV (M)741.34763.12785.32
Year 4 PV (M)753.07782.71813.22
Year 5 PV (M)761.27798.91838.03
PV of Terminal Value (M)13,215.6913,869.1314,548.17
Equity Value (M)16,902.8017,666.3018,458.29
Shares Outstanding (M)387.33387.33387.33
Fair Value$43.64$45.61$47.66
Upside / Downside21.93%27.44%33.15%

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