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U.S. Bancorp (USB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$75.57 - $146.95$103.91
Multi-Stage$71.07 - $77.64$74.30
Blended Fair Value$89.10
Current Price$48.33
Upside84.37%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.82%6.00%1.981.911.781.651.641.571.341.241.161.14
YoY Growth--4.11%6.99%7.64%1.06%4.46%16.78%8.51%6.52%1.86%2.95%
Dividend Yield--4.70%4.33%4.94%3.11%2.96%4.55%2.73%2.45%2.25%2.81%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)7,188.00
(-) Cash Dividends Paid (M)3,140.00
(=) Cash Retained (M)4,048.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,437.60898.50539.10
Cash Retained (M)4,048.004,048.004,048.00
(-) Cash Required (M)-1,437.60-898.50-539.10
(=) Excess Retained (M)2,610.403,149.503,508.90
(/) Shares Outstanding (M)1,559.001,559.001,559.00
(=) Excess Retained per Share1.672.022.25
LTM Dividend per Share2.012.012.01
(+) Excess Retained per Share1.672.022.25
(=) Adjusted Dividend3.694.034.26
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.00%5.00%6.00%
Fair Value$75.57$103.91$146.95
Upside / Downside56.35%115.01%204.05%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)7,188.007,547.657,925.298,321.828,738.209,175.419,450.67
Payout Ratio43.68%52.95%62.21%71.47%80.74%90.00%92.50%
Projected Dividends (M)3,140.003,996.264,930.355,947.907,054.948,257.868,741.87

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.00%5.00%6.00%
Year 1 PV (M)3,628.723,663.613,698.50
Year 2 PV (M)4,065.144,143.694,222.99
Year 3 PV (M)4,453.084,582.774,714.96
Year 4 PV (M)4,796.114,983.255,175.81
Year 5 PV (M)5,097.575,347.395,606.92
PV of Terminal Value (M)88,755.6293,105.4297,624.12
Equity Value (M)110,796.24115,826.14121,043.30
Shares Outstanding (M)1,559.001,559.001,559.00
Fair Value$71.07$74.30$77.64
Upside / Downside47.05%53.72%60.65%

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