Definitive Analysis
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The Interpublic Group of Companies, Inc. (IPG)

Company Dividend Discount ModelIndustry: Advertising AgenciesSector: Communication Services

Valuation Snapshot

Stable Growth$15.95 - $25.59$20.31
Multi-Stage$21.53 - $23.50$22.50
Blended Fair Value$21.40
Current Price$24.48
Upside-12.57%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.46%12.06%1.331.291.231.151.070.970.860.750.640.52
YoY Growth--3.63%4.77%6.92%7.44%9.64%12.73%14.91%17.58%21.94%22.96%
Dividend Yield--4.90%3.96%3.29%3.24%3.66%6.02%4.08%3.27%2.60%2.29%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)551.60
(-) Cash Dividends Paid (M)489.40
(=) Cash Retained (M)62.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)110.3268.9541.37
Cash Retained (M)62.2062.2062.20
(-) Cash Required (M)-110.32-68.95-41.37
(=) Excess Retained (M)-48.12-6.7520.83
(/) Shares Outstanding (M)372.70372.70372.70
(=) Excess Retained per Share-0.13-0.020.06
LTM Dividend per Share1.311.311.31
(+) Excess Retained per Share-0.13-0.020.06
(=) Adjusted Dividend1.181.301.37
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.56%2.56%3.56%
Fair Value$15.95$20.31$25.59
Upside / Downside-34.85%-17.04%4.54%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)551.60565.71580.18595.02610.25625.86644.63
Payout Ratio88.72%88.98%89.23%89.49%89.74%90.00%92.50%
Projected Dividends (M)489.40503.36517.72532.48547.66563.27596.29

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.56%2.56%3.56%
Year 1 PV (M)456.89461.39465.89
Year 2 PV (M)426.53434.97443.50
Year 3 PV (M)398.19410.07422.18
Year 4 PV (M)371.73386.59401.89
Year 5 PV (M)347.02364.45382.56
PV of Terminal Value (M)6,024.296,326.786,641.30
Equity Value (M)8,024.658,384.248,757.31
Shares Outstanding (M)372.70372.70372.70
Fair Value$21.53$22.50$23.50
Upside / Downside-12.05%-8.10%-4.02%

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