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ONE Gas, Inc. (OGS)

Company Dividend Discount ModelIndustry: Regulated GasSector: Utilities

Valuation Snapshot

Stable Growth$94.29 - $230.02$140.41
Multi-Stage$71.77 - $78.26$74.96
Blended Fair Value$107.68
Current Price$80.94
Upside33.04%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS7.23%13.09%2.542.452.282.111.941.791.641.491.241.07
YoY Growth--3.72%7.57%8.10%8.34%8.49%9.14%9.83%20.14%16.53%43.78%
Dividend Yield--3.36%3.85%2.87%2.39%2.53%2.14%1.86%2.26%1.84%1.75%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)254.94
(-) Cash Dividends Paid (M)157.90
(=) Cash Retained (M)97.04
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)50.9931.8719.12
Cash Retained (M)97.0497.0497.04
(-) Cash Required (M)-50.99-31.87-19.12
(=) Excess Retained (M)46.0665.1877.92
(/) Shares Outstanding (M)58.8458.8458.84
(=) Excess Retained per Share0.781.111.32
LTM Dividend per Share2.682.682.68
(+) Excess Retained per Share0.781.111.32
(=) Adjusted Dividend3.473.794.01
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.23%6.23%7.23%
Fair Value$94.29$140.41$230.02
Upside / Downside16.49%73.47%184.18%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)254.94270.82287.69305.62324.65344.88355.22
Payout Ratio61.93%67.55%73.16%78.77%84.39%90.00%92.50%
Projected Dividends (M)157.90182.93210.48240.75273.97310.39328.58

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.23%6.23%7.23%
Year 1 PV (M)166.10167.68169.26
Year 2 PV (M)173.52176.84180.18
Year 3 PV (M)180.21185.40190.68
Year 4 PV (M)186.21193.39200.77
Year 5 PV (M)191.55200.83210.46
PV of Terminal Value (M)3,325.343,486.373,653.59
Equity Value (M)4,222.934,410.504,604.95
Shares Outstanding (M)58.8458.8458.84
Fair Value$71.77$74.96$78.26
Upside / Downside-11.33%-7.39%-3.31%

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