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Equity Commonwealth (EQC)

Company Dividend Discount ModelIndustry: REIT - OfficeSector: Real Estate

Valuation Snapshot

Stable Growth$0.58 - $0.74$0.67
Multi-Stage$1.17 - $1.31$1.24
Blended Fair Value$0.95
Current Price$1.61
Upside-40.78%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-53.19%-10.62%0.094.331.040.063.953.962.820.000.000.00
YoY Growth---97.94%317.32%1,762.53%-98.59%-0.20%40.72%0.00%0.00%0.00%-100.00%
Dividend Yield--5.53%23.09%4.99%0.20%14.22%12.46%8.58%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)23.66
(-) Cash Dividends Paid (M)2.04
(=) Cash Retained (M)21.63
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)4.732.961.77
Cash Retained (M)21.6321.6321.63
(-) Cash Required (M)-4.73-2.96-1.77
(=) Excess Retained (M)16.9018.6719.85
(/) Shares Outstanding (M)108.19108.19108.19
(=) Excess Retained per Share0.160.170.18
LTM Dividend per Share0.020.020.02
(+) Excess Retained per Share0.160.170.18
(=) Adjusted Dividend0.170.190.20
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-16.21%-15.21%-14.21%
Fair Value$0.58$0.67$0.74
Upside / Downside-64.02%-58.53%-53.75%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)23.6620.0617.0114.4312.2310.3710.68
Payout Ratio8.60%24.88%41.16%57.44%73.72%90.00%92.50%
Projected Dividends (M)2.044.997.008.299.029.339.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-16.21%-15.21%-14.21%
Year 1 PV (M)4.524.584.63
Year 2 PV (M)5.755.886.02
Year 3 PV (M)6.166.386.61
Year 4 PV (M)6.076.366.67
Year 5 PV (M)5.696.046.40
PV of Terminal Value (M)98.80104.84111.17
Equity Value (M)126.99134.08141.51
Shares Outstanding (M)108.19108.19108.19
Fair Value$1.17$1.24$1.31
Upside / Downside-27.10%-23.02%-18.76%

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