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Deluxe Corporation (DLX)

Company Dividend Discount ModelIndustry: Advertising AgenciesSector: Communication Services

Valuation Snapshot

Stable Growth$14.24 - $20.91$17.44
Multi-Stage$23.00 - $25.18$24.07
Blended Fair Value$20.76
Current Price$19.36
Upside7.21%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.93%-0.61%1.201.181.161.141.121.141.251.281.301.32
YoY Growth--1.64%1.29%1.92%1.79%-1.92%-8.69%-2.46%-1.06%-1.73%3.74%
Dividend Yield--7.58%5.84%7.27%3.77%2.67%4.41%2.80%1.73%1.80%2.11%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)82.74
(-) Cash Dividends Paid (M)54.96
(=) Cash Retained (M)27.77
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)16.5510.346.21
Cash Retained (M)27.7727.7727.77
(-) Cash Required (M)-16.55-10.34-6.21
(=) Excess Retained (M)11.2317.4321.57
(/) Shares Outstanding (M)45.2545.2545.25
(=) Excess Retained per Share0.250.390.48
LTM Dividend per Share1.211.211.21
(+) Excess Retained per Share0.250.390.48
(=) Adjusted Dividend1.461.601.69
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.07%-0.07%0.93%
Fair Value$14.24$17.44$20.91
Upside / Downside-26.47%-9.90%7.98%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)82.7482.6882.6282.5782.5182.4684.93
Payout Ratio66.43%71.15%75.86%80.57%85.29%90.00%92.50%
Projected Dividends (M)54.9658.8262.6866.5370.3774.2178.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.07%-0.07%0.93%
Year 1 PV (M)53.3853.9254.46
Year 2 PV (M)51.6152.6653.72
Year 3 PV (M)49.7151.2352.79
Year 4 PV (M)47.7249.6751.69
Year 5 PV (M)45.6648.0250.47
PV of Terminal Value (M)792.68833.56876.11
Equity Value (M)1,040.761,089.061,139.23
Shares Outstanding (M)45.2545.2545.25
Fair Value$23.00$24.07$25.18
Upside / Downside18.80%24.32%30.04%

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