Definitive Analysis
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Group 1 Automotive, Inc. (GPI)

Company Dividend Discount ModelIndustry: Auto - DealershipsSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$626.70 - $1,520.15$931.48
Multi-Stage$449.54 - $491.77$470.27
Blended Fair Value$700.88
Current Price$437.51
Upside60.20%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.42%3.96%1.941.941.821.840.851.561.611.571.541.53
YoY Growth--0.00%6.33%-0.84%117.27%-45.81%-2.74%1.98%2.40%0.23%16.64%
Dividend Yield--0.51%0.67%0.81%1.10%0.54%3.53%2.42%2.41%2.08%2.61%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)376.30
(-) Cash Dividends Paid (M)25.70
(=) Cash Retained (M)350.60
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)75.2647.0428.22
Cash Retained (M)350.60350.60350.60
(-) Cash Required (M)-75.26-47.04-28.22
(=) Excess Retained (M)275.34303.56322.38
(/) Shares Outstanding (M)12.9912.9912.99
(=) Excess Retained per Share21.1923.3624.81
LTM Dividend per Share1.981.981.98
(+) Excess Retained per Share21.1923.3624.81
(=) Adjusted Dividend23.1725.3426.79
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.21%6.21%7.21%
Fair Value$626.70$931.48$1,520.15
Upside / Downside43.24%112.91%247.46%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)376.30399.66424.48450.83478.83508.56523.81
Payout Ratio6.83%23.46%40.10%56.73%73.37%90.00%92.50%
Projected Dividends (M)25.7093.78170.21255.77351.30457.70484.53

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.21%6.21%7.21%
Year 1 PV (M)85.1585.9686.77
Year 2 PV (M)140.32143.00145.71
Year 3 PV (M)191.46196.97202.58
Year 4 PV (M)238.77247.97257.45
Year 5 PV (M)282.46296.14310.35
PV of Terminal Value (M)4,903.485,140.995,387.61
Equity Value (M)5,841.636,111.036,390.46
Shares Outstanding (M)12.9912.9912.99
Fair Value$449.54$470.27$491.77
Upside / Downside2.75%7.49%12.40%

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