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Red Rock Resorts, Inc. (RRR)

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

Valuation Snapshot

Stable Growth$21.67 - $35.86$27.95
Multi-Stage$26.60 - $29.07$27.81
Blended Fair Value$27.88
Current Price$61.06
Upside-54.34%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS33.52%-2.55%1.150.571.131.980.070.270.270.260.102.05
YoY Growth--102.09%-49.78%-42.76%2,689.57%-73.81%0.73%2.66%153.45%-94.96%37.78%
Dividend Yield--2.65%0.93%2.54%4.07%0.22%3.17%1.02%0.89%0.47%10.96%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)190.00
(-) Cash Dividends Paid (M)114.91
(=) Cash Retained (M)75.09
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)38.0023.7514.25
Cash Retained (M)75.0975.0975.09
(-) Cash Required (M)-38.00-23.75-14.25
(=) Excess Retained (M)37.0951.3460.84
(/) Shares Outstanding (M)103.08103.08103.08
(=) Excess Retained per Share0.360.500.59
LTM Dividend per Share1.111.111.11
(+) Excess Retained per Share0.360.500.59
(=) Adjusted Dividend1.471.611.70
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.15%3.15%4.15%
Fair Value$21.67$27.95$35.86
Upside / Downside-64.52%-54.22%-41.27%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)190.00195.97202.14208.50215.06221.83228.48
Payout Ratio60.48%66.38%72.29%78.19%84.10%90.00%92.50%
Projected Dividends (M)114.91130.09146.12163.03180.86199.64211.35

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.15%3.15%4.15%
Year 1 PV (M)118.09119.24120.40
Year 2 PV (M)120.40122.77125.16
Year 3 PV (M)121.93125.55129.24
Year 4 PV (M)122.78127.66132.69
Year 5 PV (M)123.03129.17135.56
PV of Terminal Value (M)2,135.832,242.452,353.28
Equity Value (M)2,742.072,866.852,996.32
Shares Outstanding (M)103.08103.08103.08
Fair Value$26.60$27.81$29.07
Upside / Downside-56.43%-54.45%-52.39%

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