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Churchill Downs Incorporated (CHDN)

Company Dividend Discount ModelIndustry: Gambling, Resorts & CasinosSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$129.43 - $343.34$197.91
Multi-Stage$86.87 - $95.01$90.86
Blended Fair Value$144.39
Current Price$97.01
Upside48.84%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS5.63%6.76%0.400.370.360.340.320.300.320.290.260.24
YoY Growth--7.75%4.23%4.84%5.98%5.41%-6.33%10.23%12.57%9.65%14.70%
Dividend Yield--0.36%0.30%0.28%0.31%0.28%0.59%0.72%0.72%0.99%0.97%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)403.20
(-) Cash Dividends Paid (M)30.70
(=) Cash Retained (M)372.50
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)80.6450.4030.24
Cash Retained (M)372.50372.50372.50
(-) Cash Required (M)-80.64-50.40-30.24
(=) Excess Retained (M)291.86322.10342.26
(/) Shares Outstanding (M)73.0873.0873.08
(=) Excess Retained per Share3.994.414.68
LTM Dividend per Share0.420.420.42
(+) Excess Retained per Share3.994.414.68
(=) Adjusted Dividend4.414.835.10
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$129.43$197.91$343.34
Upside / Downside33.42%104.01%253.92%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)403.20429.41457.32487.05518.70552.42568.99
Payout Ratio7.61%24.09%40.57%57.05%73.52%90.00%92.50%
Projected Dividends (M)30.70103.45185.53277.84381.37497.18526.32

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)93.9394.8295.71
Year 2 PV (M)152.96155.87158.82
Year 3 PV (M)207.99213.96220.05
Year 4 PV (M)259.23269.20279.45
Year 5 PV (M)306.86321.68337.07
PV of Terminal Value (M)5,327.095,584.405,851.54
Equity Value (M)6,348.076,639.946,942.64
Shares Outstanding (M)73.0873.0873.08
Fair Value$86.87$90.86$95.01
Upside / Downside-10.45%-6.33%-2.06%

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