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PC Connection, Inc. (CNXN)

Company Dividend Discount ModelIndustry: Technology DistributorsSector: Technology

Valuation Snapshot

Stable Growth$22.81 - $32.83$27.70
Multi-Stage$36.33 - $39.94$38.10
Blended Fair Value$32.90
Current Price$61.99
Upside-46.92%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.49%0.00%0.410.320.351.330.330.330.350.350.410.41
YoY Growth--25.17%-6.01%-74.14%310.57%-0.30%-7.34%0.90%-14.64%0.00%0.61%
Dividend Yield--0.65%0.49%0.77%2.55%0.70%0.79%0.96%1.39%1.37%1.58%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)83.73
(-) Cash Dividends Paid (M)14.15
(=) Cash Retained (M)69.59
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)16.7510.476.28
Cash Retained (M)69.5969.5969.59
(-) Cash Required (M)-16.75-10.47-6.28
(=) Excess Retained (M)52.8459.1263.31
(/) Shares Outstanding (M)25.9325.9325.93
(=) Excess Retained per Share2.042.282.44
LTM Dividend per Share0.550.550.55
(+) Excess Retained per Share2.042.282.44
(=) Adjusted Dividend2.582.832.99
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$22.81$27.70$32.83
Upside / Downside-63.20%-55.31%-47.03%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)83.7382.8982.0681.2480.4379.6382.02
Payout Ratio16.89%31.52%46.14%60.76%75.38%90.00%92.50%
Projected Dividends (M)14.1526.1237.8649.3660.6371.6675.86

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)23.7023.9524.19
Year 2 PV (M)31.1731.8132.46
Year 3 PV (M)36.8738.0139.18
Year 4 PV (M)41.0942.8044.55
Year 5 PV (M)44.0746.3748.76
PV of Terminal Value (M)765.11804.95846.44
Equity Value (M)942.03987.891,035.57
Shares Outstanding (M)25.9325.9325.93
Fair Value$36.33$38.10$39.94
Upside / Downside-41.39%-38.54%-35.57%

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