Definitive Analysis
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Insteel Industries, Inc. (IIIN)

Company Dividend Discount ModelIndustry: Manufacturing - Metal FabricationSector: Industrials

Valuation Snapshot

Stable Growth$49.20 - $130.51$75.23
Multi-Stage$34.80 - $37.97$36.36
Blended Fair Value$55.79
Current Price$38.49
Upside44.96%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS56.57%25.69%1.112.602.112.101.600.120.121.091.331.07
YoY Growth---57.28%23.49%0.22%31.53%1,252.96%0.13%-89.17%-17.98%24.70%843.42%
Dividend Yield--2.89%9.45%5.51%7.65%4.02%0.53%0.54%4.54%4.70%2.99%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)41.02
(-) Cash Dividends Paid (M)21.76
(=) Cash Retained (M)19.26
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)8.205.133.08
Cash Retained (M)19.2619.2619.26
(-) Cash Required (M)-8.20-5.13-3.08
(=) Excess Retained (M)11.0614.1316.18
(/) Shares Outstanding (M)19.5619.5619.56
(=) Excess Retained per Share0.570.720.83
LTM Dividend per Share1.111.111.11
(+) Excess Retained per Share0.570.720.83
(=) Adjusted Dividend1.681.841.94
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$49.20$75.23$130.51
Upside / Downside27.82%95.46%239.08%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)41.0243.6946.5349.5552.7756.2057.89
Payout Ratio53.05%60.44%67.83%75.22%82.61%90.00%92.50%
Projected Dividends (M)21.7626.4031.5637.2743.5950.5853.55

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)23.9724.2024.43
Year 2 PV (M)26.0226.5127.01
Year 3 PV (M)27.9028.7029.52
Year 4 PV (M)29.6330.7731.94
Year 5 PV (M)31.2232.7334.29
PV of Terminal Value (M)541.96568.13595.31
Equity Value (M)680.70711.05742.51
Shares Outstanding (M)19.5619.5619.56
Fair Value$34.80$36.36$37.97
Upside / Downside-9.57%-5.54%-1.36%

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