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American International Group, Inc. (AIG-PA)

Company Dividend Discount ModelIndustry: Insurance - DiversifiedSector: Financial Services

Valuation Snapshot

Stable Growth$25.02 - $33.72$29.48
Multi-Stage$48.86 - $53.88$51.32
Blended Fair Value$40.40
Current Price$78.54
Upside-48.56%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-2.10%3.48%1.671.671.641.811.841.861.901.962.291.72
YoY Growth--0.50%1.53%-9.33%-1.81%-0.99%-2.11%-2.90%-14.58%33.46%44.38%
Dividend Yield--1.93%2.15%3.26%2.88%3.99%7.68%4.32%3.60%3.67%3.18%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3,259.00
(-) Cash Dividends Paid (M)978.00
(=) Cash Retained (M)2,281.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)651.80407.38244.43
Cash Retained (M)2,281.002,281.002,281.00
(-) Cash Required (M)-651.80-407.38-244.43
(=) Excess Retained (M)1,629.201,873.632,036.58
(/) Shares Outstanding (M)598.36598.36598.36
(=) Excess Retained per Share2.723.133.40
LTM Dividend per Share1.631.631.63
(+) Excess Retained per Share2.723.133.40
(=) Adjusted Dividend4.364.775.04
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-7.08%-6.08%-5.08%
Fair Value$25.02$29.48$33.72
Upside / Downside-68.15%-62.47%-57.07%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3,259.003,060.692,874.452,699.552,535.282,381.012,452.44
Payout Ratio30.01%42.01%54.01%66.00%78.00%90.00%92.50%
Projected Dividends (M)978.001,285.721,552.361,781.801,977.572,142.912,268.51

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-7.08%-6.08%-5.08%
Year 1 PV (M)1,165.951,178.501,191.05
Year 2 PV (M)1,276.621,304.251,332.17
Year 3 PV (M)1,328.801,372.171,416.47
Year 4 PV (M)1,337.421,395.931,456.34
Year 5 PV (M)1,314.241,386.501,461.91
PV of Terminal Value (M)22,815.1524,069.6125,378.64
Equity Value (M)29,238.1830,706.9532,236.58
Shares Outstanding (M)598.36598.36598.36
Fair Value$48.86$51.32$53.88
Upside / Downside-37.78%-34.66%-31.40%

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