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Essex Property Trust, Inc. (ESS)

Company Dividend Discount ModelIndustry: REIT - ResidentialSector: Real Estate

Valuation Snapshot

Stable Growth$153.35 - $253.00$197.57
Multi-Stage$193.07 - $210.78$201.76
Blended Fair Value$199.67
Current Price$267.66
Upside-25.40%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.09%9.06%9.649.128.808.448.337.897.537.006.395.71
YoY Growth--5.71%3.72%4.25%1.26%5.58%4.87%7.45%9.61%11.95%40.94%
Dividend Yield--3.15%3.81%4.21%2.44%3.07%3.58%2.61%2.91%2.76%2.44%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)846.55
(-) Cash Dividends Paid (M)646.01
(=) Cash Retained (M)200.54
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)169.31105.8263.49
Cash Retained (M)200.54200.54200.54
(-) Cash Required (M)-169.31-105.82-63.49
(=) Excess Retained (M)31.2394.72137.05
(/) Shares Outstanding (M)64.3464.3464.34
(=) Excess Retained per Share0.491.472.13
LTM Dividend per Share10.0410.0410.04
(+) Excess Retained per Share0.491.472.13
(=) Adjusted Dividend10.5311.5112.17
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.09%3.09%4.09%
Fair Value$153.35$197.57$253.00
Upside / Downside-42.71%-26.19%-5.48%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)846.55872.71899.69927.50956.16985.721,015.29
Payout Ratio76.31%79.05%81.79%84.52%87.26%90.00%92.50%
Projected Dividends (M)646.01689.87735.82783.96834.37887.15939.14

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate2.09%3.09%4.09%
Year 1 PV (M)626.21632.34638.47
Year 2 PV (M)606.28618.22630.27
Year 3 PV (M)586.33603.73621.47
Year 4 PV (M)566.45588.97612.16
Year 5 PV (M)546.70574.00602.38
PV of Terminal Value (M)9,490.619,964.6210,457.38
Equity Value (M)12,422.5712,981.8713,562.13
Shares Outstanding (M)64.3464.3464.34
Fair Value$193.07$201.76$210.78
Upside / Downside-27.87%-24.62%-21.25%

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