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Reliance Steel & Aluminum Co. (RS)

Company Dividend Discount ModelIndustry: SteelSector: Basic Materials

Valuation Snapshot

Stable Growth$176.60 - $304.16$231.58
Multi-Stage$196.17 - $214.62$205.22
Blended Fair Value$218.40
Current Price$280.83
Upside-22.23%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS10.54%8.67%4.674.454.063.313.072.832.722.472.252.25
YoY Growth--4.87%9.67%22.66%7.86%8.46%4.13%10.08%9.63%0.25%10.49%
Dividend Yield--1.62%1.34%1.58%1.81%2.01%3.23%2.95%2.88%2.81%3.25%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)728.20
(-) Cash Dividends Paid (M)252.40
(=) Cash Retained (M)475.80
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)145.6491.0354.62
Cash Retained (M)475.80475.80475.80
(-) Cash Required (M)-145.64-91.03-54.62
(=) Excess Retained (M)330.16384.78421.19
(/) Shares Outstanding (M)53.4853.4853.48
(=) Excess Retained per Share6.177.197.88
LTM Dividend per Share4.724.724.72
(+) Excess Retained per Share6.177.197.88
(=) Adjusted Dividend10.8911.9112.59
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate2.74%3.74%4.74%
Fair Value$176.60$231.58$304.16
Upside / Downside-37.12%-17.54%8.31%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)728.20755.46783.73813.07843.50875.07901.32
Payout Ratio34.66%45.73%56.80%67.86%78.93%90.00%92.50%
Projected Dividends (M)252.40345.46445.13551.78665.79787.56833.72

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate2.74%3.74%4.74%
Year 1 PV (M)313.65316.70319.76
Year 2 PV (M)366.93374.11381.36
Year 3 PV (M)412.96425.14437.55
Year 4 PV (M)452.41470.28488.68
Year 5 PV (M)485.88509.99535.04
PV of Terminal Value (M)8,459.778,879.569,315.85
Equity Value (M)10,491.6010,975.7811,478.24
Shares Outstanding (M)53.4853.4853.48
Fair Value$196.17$205.22$214.62
Upside / Downside-30.15%-26.92%-23.58%

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