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Allison Transmission Holdings, Inc. (ALSN)

Company Dividend Discount ModelIndustry: Auto - PartsSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$88.21 - $141.63$112.35
Multi-Stage$108.16 - $118.60$113.28
Blended Fair Value$112.82
Current Price$84.88
Upside32.91%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.57%-0.51%1.020.970.940.950.910.850.941.041.181.23
YoY Growth--4.82%3.75%-1.23%3.85%6.85%-8.75%-10.11%-11.53%-4.73%15.28%
Dividend Yield--1.06%1.20%2.07%2.41%2.23%2.62%2.04%2.66%3.26%4.57%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)699.00
(-) Cash Dividends Paid (M)90.00
(=) Cash Retained (M)609.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)139.8087.3852.43
Cash Retained (M)609.00609.00609.00
(-) Cash Required (M)-139.80-87.38-52.43
(=) Excess Retained (M)469.20521.63556.58
(/) Shares Outstanding (M)85.5585.5585.55
(=) Excess Retained per Share5.486.106.51
LTM Dividend per Share1.051.051.05
(+) Excess Retained per Share5.486.106.51
(=) Adjusted Dividend6.547.157.56
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.57%2.57%3.57%
Fair Value$88.21$112.35$141.63
Upside / Downside3.92%32.36%66.86%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)699.00716.97735.41754.32773.71793.61817.42
Payout Ratio12.88%28.30%43.73%59.15%74.58%90.00%92.50%
Projected Dividends (M)90.00202.91321.56446.18577.00714.25756.11

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.57%2.57%3.57%
Year 1 PV (M)184.17185.99187.80
Year 2 PV (M)264.92270.16275.46
Year 3 PV (M)333.65343.61353.75
Year 4 PV (M)391.64407.29423.41
Year 5 PV (M)440.04462.13485.10
PV of Terminal Value (M)7,639.048,022.578,421.34
Equity Value (M)9,253.479,691.7410,146.86
Shares Outstanding (M)85.5585.5585.55
Fair Value$108.16$113.28$118.60
Upside / Downside27.43%33.46%39.73%

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