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Tempur Sealy International, Inc. (TPX)

Company Dividend Discount ModelIndustry: Furnishings, Fixtures & AppliancesSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$36.85 - $97.76$56.35
Multi-Stage$25.75 - $28.10$26.90
Blended Fair Value$41.63
Current Price$57.60
Upside-27.73%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS12.64%0.00%0.120.390.350.310.100.070.000.000.000.00
YoY Growth---68.73%10.21%11.73%226.94%44.03%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--0.21%0.70%0.89%1.13%0.26%0.61%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)315.20
(-) Cash Dividends Paid (M)132.40
(=) Cash Retained (M)182.80
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)63.0439.4023.64
Cash Retained (M)182.80182.80182.80
(-) Cash Required (M)-63.04-39.40-23.64
(=) Excess Retained (M)119.76143.40159.16
(/) Shares Outstanding (M)200.63200.63200.63
(=) Excess Retained per Share0.600.710.79
LTM Dividend per Share0.660.660.66
(+) Excess Retained per Share0.600.710.79
(=) Adjusted Dividend1.261.371.45
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$36.85$56.35$97.76
Upside / Downside-36.02%-2.16%69.73%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)315.20335.69357.51380.75405.49431.85444.81
Payout Ratio42.01%51.60%61.20%70.80%80.40%90.00%92.50%
Projected Dividends (M)132.40173.23218.81269.58326.02388.67411.45

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)157.29158.78160.27
Year 2 PV (M)180.40183.83187.30
Year 3 PV (M)201.81207.60213.50
Year 4 PV (M)221.61230.13238.90
Year 5 PV (M)239.89251.47263.50
PV of Terminal Value (M)4,164.444,365.584,574.42
Equity Value (M)5,165.435,397.405,637.90
Shares Outstanding (M)200.63200.63200.63
Fair Value$25.75$26.90$28.10
Upside / Downside-55.30%-53.29%-51.21%

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