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Arezzo Indústria e Comércio S.A. (ARZZ3.SA)

Company Dividend Discount ModelIndustry: Apparel - Footwear & AccessoriesSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$323.41 - $770.50$722.07
Multi-Stage$115.48 - $126.26$120.77
Blended Fair Value$421.42
Current Price$51.09
Upside724.86%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS32.05%24.28%2.621.590.281.511.270.651.250.260.400.28
YoY Growth--64.90%458.51%-81.19%19.14%94.49%-47.96%373.31%-33.18%40.26%-5.17%
Dividend Yield--4.20%2.53%0.33%2.25%3.64%1.38%2.77%0.99%2.07%1.46%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)438.15
(-) Cash Dividends Paid (M)296.30
(=) Cash Retained (M)141.85
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)87.6354.7732.86
Cash Retained (M)141.85141.85141.85
(-) Cash Required (M)-87.63-54.77-32.86
(=) Excess Retained (M)54.2287.08108.99
(/) Shares Outstanding (M)113.09113.09113.09
(=) Excess Retained per Share0.480.770.96
LTM Dividend per Share2.622.622.62
(+) Excess Retained per Share0.480.770.96
(=) Adjusted Dividend3.103.393.58
WACC / Discount Rate6.51%6.51%6.51%
Growth Rate5.50%6.50%7.50%
Fair Value$323.41$722.07$770.50
Upside / Downside533.02%1,313.33%1,408.12%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)438.15466.63496.96529.26563.67600.30618.31
Payout Ratio67.63%72.10%76.58%81.05%85.53%90.00%92.50%
Projected Dividends (M)296.30336.44380.55428.97482.08540.27571.94

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.51%6.51%6.51%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)312.91315.88318.84
Year 2 PV (M)329.18335.45341.77
Year 3 PV (M)345.10355.01365.11
Year 4 PV (M)360.70374.57388.84
Year 5 PV (M)375.97394.13412.99
PV of Terminal Value (M)11,335.8011,883.3212,451.80
Equity Value (M)13,059.6613,658.3614,279.35
Shares Outstanding (M)113.09113.09113.09
Fair Value$115.48$120.77$126.26
Upside / Downside126.03%136.39%147.14%

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