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Red Rock Resorts, Inc. (RRR)

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

Valuation Snapshot

Stable Growth$21.72 - $35.99$28.04
Multi-Stage$26.68 - $29.16$27.90
Blended Fair Value$27.97
Current Price$61.06
Upside-54.20%
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 Rate9.08%9.08%9.08%
Growth Rate2.15%3.15%4.15%
Fair Value$21.72$28.04$35.99
Upside / Downside-64.42%-54.08%-41.06%

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 Rate9.08%9.08%9.08%
Growth Rate2.15%3.15%4.15%
Year 1 PV (M)118.11119.26120.42
Year 2 PV (M)120.44122.81125.20
Year 3 PV (M)121.99125.61129.30
Year 4 PV (M)122.87127.75132.77
Year 5 PV (M)123.13129.28135.67
PV of Terminal Value (M)2,143.922,250.942,362.19
Equity Value (M)2,750.462,875.653,005.56
Shares Outstanding (M)103.08103.08103.08
Fair Value$26.68$27.90$29.16
Upside / Downside-56.30%-54.31%-52.25%

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