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Western Asset High Income Fund II Inc. (HIX)

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

Valuation Snapshot

Stable Growth$4.78 - $6.88$5.81
Multi-Stage$8.49 - $9.28$8.87
Blended Fair Value$7.34
Current Price$4.08
Upside79.93%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS1.86%-2.91%0.530.390.360.330.430.480.470.500.600.65
YoY Growth--35.06%6.81%12.09%-24.33%-10.36%2.92%-7.08%-16.54%-7.27%-8.30%
Dividend Yield--12.90%8.98%7.63%6.05%6.07%8.71%6.97%7.66%8.10%9.39%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)68.10
(-) Cash Dividends Paid (M)65.45
(=) Cash Retained (M)2.65
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)13.628.515.11
Cash Retained (M)2.652.652.65
(-) Cash Required (M)-13.62-8.51-5.11
(=) Excess Retained (M)-10.97-5.86-2.46
(/) Shares Outstanding (M)100.60100.60100.60
(=) Excess Retained per Share-0.11-0.06-0.02
LTM Dividend per Share0.650.650.65
(+) Excess Retained per Share-0.11-0.06-0.02
(=) Adjusted Dividend0.540.590.63
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$4.78$5.81$6.88
Upside / Downside17.22%42.34%68.70%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)68.1067.4266.7566.0865.4264.7766.71
Payout Ratio96.11%94.89%93.67%92.44%91.22%90.00%92.50%
Projected Dividends (M)65.4563.9862.5261.0959.6858.2961.70

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)58.0558.6459.23
Year 2 PV (M)51.4752.5353.59
Year 3 PV (M)45.6347.0448.48
Year 4 PV (M)40.4542.1243.85
Year 5 PV (M)35.8537.7139.66
PV of Terminal Value (M)622.30654.71688.45
Equity Value (M)853.75892.76933.27
Shares Outstanding (M)100.60100.60100.60
Fair Value$8.49$8.87$9.28
Upside / Downside108.01%117.51%127.38%

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