Definitive Analysis
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PACCAR Inc (PCAR)

Company Dividend Discount ModelIndustry: Agricultural - MachinerySector: Industrials

Valuation Snapshot

Stable Growth$118.80 - $311.89$181.07
Multi-Stage$87.58 - $95.38$91.41
Blended Fair Value$136.24
Current Price$98.32
Upside38.57%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS14.98%13.88%4.342.881.911.342.352.161.531.061.571.29
YoY Growth--50.70%51.15%41.91%-42.89%8.89%41.56%44.06%-32.68%21.87%9.09%
Dividend Yield--4.46%2.34%2.61%2.29%3.80%5.30%3.32%2.40%3.51%3.54%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,690.90
(-) Cash Dividends Paid (M)2,251.10
(=) Cash Retained (M)439.80
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)538.18336.36201.82
Cash Retained (M)439.80439.80439.80
(-) Cash Required (M)-538.18-336.36-201.82
(=) Excess Retained (M)-98.38103.44237.98
(/) Shares Outstanding (M)526.77526.77526.77
(=) Excess Retained per Share-0.190.200.45
LTM Dividend per Share4.274.274.27
(+) Excess Retained per Share-0.190.200.45
(=) Adjusted Dividend4.094.474.73
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.47%6.47%7.47%
Fair Value$118.80$181.07$311.89
Upside / Downside20.83%84.17%217.22%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,690.902,865.003,050.363,247.713,457.833,681.553,791.99
Payout Ratio83.66%84.92%86.19%87.46%88.73%90.00%92.50%
Projected Dividends (M)2,251.102,433.092,629.212,840.533,068.183,313.393,507.60

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.47%6.47%7.47%
Year 1 PV (M)2,209.242,230.192,251.14
Year 2 PV (M)2,167.682,208.982,250.67
Year 3 PV (M)2,126.442,187.502,249.72
Year 4 PV (M)2,085.552,165.772,248.29
Year 5 PV (M)2,045.022,143.822,246.41
PV of Terminal Value (M)35,501.4837,216.7238,997.62
Equity Value (M)46,135.4248,152.9950,243.85
Shares Outstanding (M)526.77526.77526.77
Fair Value$87.58$91.41$95.38
Upside / Downside-10.92%-7.03%-2.99%

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