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Arko Corp. (ARKO)

Company Dividend Discount ModelIndustry: Specialty RetailSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$3.77 - $10.01$5.77
Multi-Stage$2.68 - $2.92$2.80
Blended Fair Value$4.28
Current Price$4.23
Upside1.25%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.00%0.00%0.120.120.090.000.000.000.000.000.000.00
YoY Growth---1.80%31.02%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--3.07%2.14%1.11%0.00%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)18.59
(-) Cash Dividends Paid (M)10.38
(=) Cash Retained (M)8.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)3.722.321.39
Cash Retained (M)8.208.208.20
(-) Cash Required (M)-3.72-2.32-1.39
(=) Excess Retained (M)4.495.886.81
(/) Shares Outstanding (M)115.57115.57115.57
(=) Excess Retained per Share0.040.050.06
LTM Dividend per Share0.090.090.09
(+) Excess Retained per Share0.040.050.06
(=) Adjusted Dividend0.130.140.15
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$3.77$5.77$10.01
Upside / Downside-10.81%36.38%136.60%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)18.5919.8021.0822.4523.9125.4726.23
Payout Ratio55.86%62.69%69.52%76.34%83.17%90.00%92.50%
Projected Dividends (M)10.3812.4114.6617.1419.8922.9224.26

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)11.2711.3711.48
Year 2 PV (M)12.0812.3112.55
Year 3 PV (M)12.8313.2013.58
Year 4 PV (M)13.5214.0414.57
Year 5 PV (M)14.1514.8315.54
PV of Terminal Value (M)245.57257.43269.75
Equity Value (M)309.42323.19337.46
Shares Outstanding (M)115.57115.57115.57
Fair Value$2.68$2.80$2.92
Upside / Downside-36.70%-33.89%-30.97%

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