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BorgWarner Inc. (0HOU.L)

Company Dividend Discount ModelIndustry: Auto - PartsSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$3.71 - $5.19$4.44
Multi-Stage$7.00 - $7.66$7.32
Blended Fair Value$5.88
Current Price$43.96
Upside-86.62%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-6.89%-1.68%0.450.600.740.740.670.640.650.570.520.54
YoY Growth---24.62%-19.25%-0.62%10.96%4.29%-1.41%14.42%9.44%-2.83%0.52%
Dividend Yield--1.57%1.70%1.71%2.17%1.64%3.00%1.83%1.29%1.42%1.59%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)134.00
(-) Cash Dividends Paid (M)108.00
(=) Cash Retained (M)26.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)26.8016.7510.05
Cash Retained (M)26.0026.0026.00
(-) Cash Required (M)-26.80-16.75-10.05
(=) Excess Retained (M)-0.809.2515.95
(/) Shares Outstanding (M)217.95217.95217.95
(=) Excess Retained per Share0.000.040.07
LTM Dividend per Share0.500.500.50
(+) Excess Retained per Share0.000.040.07
(=) Adjusted Dividend0.490.540.57
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-3.68%-2.68%-1.68%
Fair Value$3.71$4.44$5.19
Upside / Downside-91.57%-89.89%-88.20%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)134.00130.41126.91123.51120.20116.98120.49
Payout Ratio80.60%82.48%84.36%86.24%88.12%90.00%92.50%
Projected Dividends (M)108.00107.56107.06106.51105.92105.28111.45

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-3.68%-2.68%-1.68%
Year 1 PV (M)97.5798.5999.60
Year 2 PV (M)88.1189.9591.81
Year 3 PV (M)79.5282.0384.58
Year 4 PV (M)71.7474.7777.89
Year 5 PV (M)64.6968.1271.69
PV of Terminal Value (M)1,123.011,182.531,244.54
Equity Value (M)1,524.651,595.971,670.11
Shares Outstanding (M)217.95217.95217.95
Fair Value$7.00$7.32$7.66
Upside / Downside-84.09%-83.34%-82.57%

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