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Travel + Leisure Co. (TNL)

Company Dividend Discount ModelIndustry: Travel ServicesSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$34.82 - $48.33$41.60
Multi-Stage$65.05 - $71.42$68.17
Blended Fair Value$54.88
Current Price$59.49
Upside-7.75%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-3.07%-2.29%2.102.012.001.612.042.462.873.583.302.99
YoY Growth--4.41%0.74%23.85%-21.01%-16.87%-14.43%-19.83%8.52%10.40%12.85%
Dividend Yield--4.54%4.20%5.09%2.78%3.34%11.32%6.96%6.93%8.67%8.66%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)411.00
(-) Cash Dividends Paid (M)226.00
(=) Cash Retained (M)185.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)82.2051.3830.83
Cash Retained (M)185.00185.00185.00
(-) Cash Required (M)-82.20-51.38-30.83
(=) Excess Retained (M)102.80133.63154.18
(/) Shares Outstanding (M)67.6067.6067.60
(=) Excess Retained per Share1.521.982.28
LTM Dividend per Share3.343.343.34
(+) Excess Retained per Share1.521.982.28
(=) Adjusted Dividend4.865.325.62
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-4.29%-3.29%-2.29%
Fair Value$34.82$41.60$48.33
Upside / Downside-41.47%-30.08%-18.75%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)411.00397.48384.41371.77359.54347.71358.14
Payout Ratio54.99%61.99%68.99%76.00%83.00%90.00%92.50%
Projected Dividends (M)226.00246.40265.21282.52298.41312.94331.28

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-4.29%-3.29%-2.29%
Year 1 PV (M)223.55225.89228.23
Year 2 PV (M)218.31222.90227.53
Year 3 PV (M)211.00217.68224.50
Year 4 PV (M)202.20210.78219.63
Year 5 PV (M)192.38202.65213.34
PV of Terminal Value (M)3,349.663,528.353,714.58
Equity Value (M)4,397.114,608.244,827.81
Shares Outstanding (M)67.6067.6067.60
Fair Value$65.05$68.17$71.42
Upside / Downside9.34%14.59%20.05%

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