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Organon & Co. (OGN)

Company Dividend Discount ModelIndustry: Drug Manufacturers - GeneralSector: Healthcare

Valuation Snapshot

Stable Growth$13.61 - $19.60$16.53
Multi-Stage$22.17 - $24.34$23.24
Blended Fair Value$19.88
Current Price$10.68
Upside86.18%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR20242023202220212020201920182017
DPS0.00%0.00%1.141.131.110.560.000.000.000.000.000.00
YoY Growth--1.02%1.38%100.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--7.66%6.10%4.73%1.59%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)501.00
(-) Cash Dividends Paid (M)158.00
(=) Cash Retained (M)343.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)100.2062.6337.58
Cash Retained (M)343.00343.00343.00
(-) Cash Required (M)-100.20-62.63-37.58
(=) Excess Retained (M)242.80280.38305.43
(/) Shares Outstanding (M)260.42260.42260.42
(=) Excess Retained per Share0.931.081.17
LTM Dividend per Share0.610.610.61
(+) Excess Retained per Share0.931.081.17
(=) Adjusted Dividend1.541.681.78
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$13.61$16.53$19.60
Upside / Downside27.46%54.80%83.50%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)501.00495.99491.03486.12481.26476.45490.74
Payout Ratio31.54%43.23%54.92%66.61%78.31%90.00%92.50%
Projected Dividends (M)158.00214.41269.68323.83376.86428.80453.93

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)194.58196.57198.55
Year 2 PV (M)222.10226.66231.26
Year 3 PV (M)242.02249.50257.14
Year 4 PV (M)255.60266.20277.11
Year 5 PV (M)263.93277.67291.98
PV of Terminal Value (M)4,595.344,834.635,083.79
Equity Value (M)5,773.576,051.226,339.83
Shares Outstanding (M)260.42260.42260.42
Fair Value$22.17$23.24$24.34
Upside / Downside107.58%117.57%127.94%

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