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John Hancock Preferred Income Fund II (HPF)

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

Valuation Snapshot

Stable Growth$25.20 - $36.09$30.53
Multi-Stage$44.28 - $48.47$46.33
Blended Fair Value$38.43
Current Price$16.04
Upside139.61%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS-0.25%-1.39%1.441.431.431.431.441.461.621.641.641.65
YoY Growth--0.44%0.13%-0.21%-0.85%-0.74%-10.02%-1.32%0.11%-0.81%-0.15%
Dividend Yield--8.96%8.45%9.02%7.53%6.57%7.89%6.83%7.71%7.31%7.27%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)78.92
(-) Cash Dividends Paid (M)61.95
(=) Cash Retained (M)16.97
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)15.789.875.92
Cash Retained (M)16.9716.9716.97
(-) Cash Required (M)-15.78-9.87-5.92
(=) Excess Retained (M)1.197.1011.05
(/) Shares Outstanding (M)21.5921.5921.59
(=) Excess Retained per Share0.050.330.51
LTM Dividend per Share2.872.872.87
(+) Excess Retained per Share0.050.330.51
(=) Adjusted Dividend2.923.203.38
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.25%-1.25%-0.25%
Fair Value$25.20$30.53$36.09
Upside / Downside57.09%90.36%125.03%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)78.9277.9476.9776.0175.0674.1276.35
Payout Ratio78.50%80.80%83.10%85.40%87.70%90.00%92.50%
Projected Dividends (M)61.9562.9763.9664.9165.8366.7170.62

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.25%-1.25%-0.25%
Year 1 PV (M)57.1457.7258.31
Year 2 PV (M)52.6553.7454.83
Year 3 PV (M)48.4849.9951.52
Year 4 PV (M)44.6146.4748.38
Year 5 PV (M)41.0243.1645.39
PV of Terminal Value (M)712.15749.33788.04
Equity Value (M)956.061,000.401,046.47
Shares Outstanding (M)21.5921.5921.59
Fair Value$44.28$46.33$48.47
Upside / Downside176.06%188.86%202.17%

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