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OGE Energy Corp. (OGE)

Company Dividend Discount ModelIndustry: Regulated ElectricSector: Utilities

Valuation Snapshot

Stable Growth$28.61 - $46.94$36.78
Multi-Stage$36.05 - $39.38$37.68
Blended Fair Value$37.23
Current Price$46.27
Upside-19.54%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-65.32%-38.18%0.011.651.631.611.561.481.351.231.121.01
YoY Growth---99.55%1.18%1.35%3.18%5.25%9.92%9.94%10.00%10.02%11.14%
Dividend Yield--0.02%4.81%4.33%3.95%4.82%4.82%3.14%3.74%3.19%3.54%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)503.40
(-) Cash Dividends Paid (M)340.90
(=) Cash Retained (M)162.50
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)100.6862.9337.76
Cash Retained (M)162.50162.50162.50
(-) Cash Required (M)-100.68-62.93-37.76
(=) Excess Retained (M)61.8299.58124.75
(/) Shares Outstanding (M)201.88201.88201.88
(=) Excess Retained per Share0.310.490.62
LTM Dividend per Share1.691.691.69
(+) Excess Retained per Share0.310.490.62
(=) Adjusted Dividend1.992.182.31
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.99%2.99%3.99%
Fair Value$28.61$36.78$46.94
Upside / Downside-38.16%-20.52%1.44%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)503.40518.44533.93549.88566.31583.23600.72
Payout Ratio67.72%72.18%76.63%81.09%85.54%90.00%92.50%
Projected Dividends (M)340.90374.19409.16445.89484.44524.90555.67

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.99%2.99%3.99%
Year 1 PV (M)339.65342.98346.31
Year 2 PV (M)337.12343.76350.47
Year 3 PV (M)333.47343.38353.48
Year 4 PV (M)328.87341.96355.44
Year 5 PV (M)323.45339.62356.43
PV of Terminal Value (M)5,615.105,895.836,187.69
Equity Value (M)7,277.667,607.547,949.82
Shares Outstanding (M)201.88201.88201.88
Fair Value$36.05$37.68$39.38
Upside / Downside-22.09%-18.56%-14.89%

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