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T. Rowe Price Tax-Free Income Fd (PRTAX)

Company Dividend Discount ModelIndustry: Asset Management - IncomeSector: Financial Services

Valuation Snapshot

Stable Growth$0.05 - $0.06$0.06
Multi-Stage$0.11 - $0.12$0.11
Blended Fair Value$0.08
Current Price$8.69
Upside-99.02%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS0.00%-9.21%0.010.020.010.020.020.000.030.030.030.03
YoY Growth---29.67%13.25%-16.85%-11.44%0.00%-100.00%-14.40%4.49%-1.21%0.55%
Dividend Yield--0.13%0.17%0.14%0.16%0.18%0.00%0.26%0.31%0.28%0.28%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3.08
(-) Cash Dividends Paid (M)2.74
(=) Cash Retained (M)0.34
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)0.620.380.23
Cash Retained (M)0.340.340.34
(-) Cash Required (M)-0.62-0.38-0.23
(=) Excess Retained (M)-0.28-0.050.11
(/) Shares Outstanding (M)243.11243.11243.11
(=) Excess Retained per Share0.000.000.00
LTM Dividend per Share0.010.010.01
(+) Excess Retained per Share0.000.000.00
(=) Adjusted Dividend0.010.010.01
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-10.02%-9.02%-8.02%
Fair Value$0.05$0.06$0.06
Upside / Downside-99.45%-99.36%-99.28%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3.082.802.552.322.111.921.98
Payout Ratio89.04%89.23%89.43%89.62%89.81%90.00%92.50%
Projected Dividends (M)2.742.502.282.081.891.731.83

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-10.02%-9.02%-8.02%
Year 1 PV (M)2.272.292.32
Year 2 PV (M)1.871.911.96
Year 3 PV (M)1.551.601.65
Year 4 PV (M)1.281.341.40
Year 5 PV (M)1.061.121.18
PV of Terminal Value (M)18.3619.4020.49
Equity Value (M)26.3927.6729.00
Shares Outstanding (M)243.11243.11243.11
Fair Value$0.11$0.11$0.12
Upside / Downside-98.75%-98.69%-98.63%

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