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The Wendy's Company (WEN)

Company Dividend Discount ModelIndustry: RestaurantsSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$14.57 - $27.42$19.79
Multi-Stage$14.94 - $16.29$15.60
Blended Fair Value$17.70
Current Price$9.13
Upside93.83%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320232022202120192018201720172016
DPS16.23%10.53%1.031.060.540.480.330.490.410.350.320.36
YoY Growth---2.30%95.97%12.58%46.22%-32.69%19.66%17.87%7.03%-11.15%-4.36%
Dividend Yield--7.06%5.68%2.42%2.18%1.58%3.25%2.28%2.04%2.38%3.34%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)186.09
(-) Cash Dividends Paid (M)153.99
(=) Cash Retained (M)32.11
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)37.2223.2613.96
Cash Retained (M)32.1132.1132.11
(-) Cash Required (M)-37.22-23.26-13.96
(=) Excess Retained (M)-5.118.8418.15
(/) Shares Outstanding (M)198.02198.02198.02
(=) Excess Retained per Share-0.030.040.09
LTM Dividend per Share0.780.780.78
(+) Excess Retained per Share-0.030.040.09
(=) Adjusted Dividend0.750.820.87
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.75%4.75%5.75%
Fair Value$14.57$19.79$27.42
Upside / Downside59.63%116.78%200.38%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)186.09194.92204.17213.87224.02234.65241.69
Payout Ratio82.75%84.20%85.65%87.10%88.55%90.00%92.50%
Projected Dividends (M)153.99164.12174.87186.27198.37211.18223.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.75%4.75%5.75%
Year 1 PV (M)149.00150.44151.87
Year 2 PV (M)144.13146.92149.74
Year 3 PV (M)139.38143.45147.60
Year 4 PV (M)134.75140.02145.45
Year 5 PV (M)130.24136.64143.29
PV of Terminal Value (M)2,260.972,372.062,487.47
Equity Value (M)2,958.483,089.533,225.42
Shares Outstanding (M)198.02198.02198.02
Fair Value$14.94$15.60$16.29
Upside / Downside63.64%70.89%78.40%

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