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American Funds Retirement Income Portfolio - Moderate Class F-1 (FBFWX)

Company Dividend Discount ModelIndustry: Asset Management - IncomeSector: Financial Services

Valuation Snapshot

Stable Growth$14.84 - $22.84$18.56
Multi-Stage$21.75 - $23.77$22.74
Blended Fair Value$20.65
Current Price$13.38
Upside54.35%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.08%2.08%1.201.201.010.200.301.201.351.191.191.19
YoY Growth--0.04%19.34%398.51%-32.38%-75.05%-11.68%13.46%0.02%0.15%21.93%
Dividend Yield--9.42%9.92%8.83%1.60%2.41%11.43%12.08%10.84%11.05%11.58%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3,151.00
(-) Cash Dividends Paid (M)2,513.54
(=) Cash Retained (M)637.46
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)630.20393.88236.33
Cash Retained (M)637.46637.46637.46
(-) Cash Required (M)-630.20-393.88-236.33
(=) Excess Retained (M)7.26243.59401.14
(/) Shares Outstanding (M)1,997.751,997.751,997.75
(=) Excess Retained per Share0.000.120.20
LTM Dividend per Share1.261.261.26
(+) Excess Retained per Share0.000.120.20
(=) Adjusted Dividend1.261.381.46
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.53%1.53%2.53%
Fair Value$14.84$18.56$22.84
Upside / Downside10.90%38.73%70.72%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3,151.003,199.253,248.233,297.973,348.463,399.733,501.73
Payout Ratio79.77%81.82%83.86%85.91%87.95%90.00%92.50%
Projected Dividends (M)2,513.542,617.482,724.022,833.212,945.103,059.763,239.10

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.53%1.53%2.53%
Year 1 PV (M)2,375.972,399.602,423.23
Year 2 PV (M)2,244.522,289.392,334.71
Year 3 PV (M)2,119.082,182.952,248.09
Year 4 PV (M)1,999.522,080.272,163.45
Year 5 PV (M)1,885.681,981.352,080.87
PV of Terminal Value (M)32,832.3134,498.0636,230.75
Equity Value (M)43,457.0745,431.6347,481.10
Shares Outstanding (M)1,997.751,997.751,997.75
Fair Value$21.75$22.74$23.77
Upside / Downside62.58%69.97%77.63%

High-Yield Dividend Screener

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ELCEntergy Louisiana, LLC COLLATERAL TR MT11.33%$2.3457.35%
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ERHAllspring Utilities and High Income Fund10.26%$1.2231.06%
GDVThe Gabelli Dividend & Income Trust10.25%$2.8539.93%
CIIBlackRock Enhanced Capital and Income Fund, Inc.10.23%$2.3844.19%
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NEE-PNNextEra Energy, Inc. Series N J9.24%$2.2170.10%
CMSDCMS Energy Corporation 5.875% Junior Subordinated Notes due 20799.20%$2.1762.27%
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UANCVR Partners, LP8.96%$9.0975.52%
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