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Entergy Arkansas, Inc. 1M BD 4.875%66 (EAI)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$174.86 - $466.79$267.90
Multi-Stage$117.45 - $128.43$122.84
Blended Fair Value$195.37
Current Price$21.17
Upside822.86%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS21.94%33.79%1.231.660.340.200.380.460.370.070.030.03
YoY Growth---25.66%384.88%72.00%-47.37%-17.39%23.18%468.28%147.75%-3.52%-59.27%
Dividend Yield--5.92%7.29%1.52%0.79%1.48%1.85%1.49%0.27%0.12%0.04%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,867.42
(-) Cash Dividends Paid (M)181.34
(=) Cash Retained (M)1,686.08
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)373.48233.43140.06
Cash Retained (M)1,686.081,686.081,686.08
(-) Cash Required (M)-373.48-233.43-140.06
(=) Excess Retained (M)1,312.601,452.651,546.02
(/) Shares Outstanding (M)251.77251.77251.77
(=) Excess Retained per Share5.215.776.14
LTM Dividend per Share0.720.720.72
(+) Excess Retained per Share5.215.776.14
(=) Adjusted Dividend5.936.496.86
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$174.86$267.90$466.79
Upside / Downside725.98%1,165.45%2,104.96%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,867.421,988.802,118.072,255.752,402.372,558.522,635.28
Payout Ratio9.71%25.77%41.83%57.88%73.94%90.00%92.50%
Projected Dividends (M)181.34512.48885.911,305.721,776.362,302.672,437.63

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)465.41469.82474.24
Year 2 PV (M)730.65744.56758.61
Year 3 PV (M)977.971,006.041,034.65
Year 4 PV (M)1,208.271,254.731,302.53
Year 5 PV (M)1,422.401,491.101,562.43
PV of Terminal Value (M)24,765.8725,962.0727,204.05
Equity Value (M)29,570.5630,928.3332,336.50
Shares Outstanding (M)251.77251.77251.77
Fair Value$117.45$122.84$128.43
Upside / Downside454.79%480.26%506.68%

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