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First Trust Senior Floating Rate Income Fund II (FCT)

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

Valuation Snapshot

Stable Growth$11.57 - $16.65$14.05
Multi-Stage$19.79 - $21.68$20.72
Blended Fair Value$17.38
Current Price$9.91
Upside75.41%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS3.90%3.05%0.930.930.710.781.000.770.600.630.680.72
YoY Growth--0.00%31.30%-8.55%-22.58%30.22%29.07%-4.86%-7.78%-6.10%4.86%
Dividend Yield--9.40%8.89%7.42%7.11%8.02%6.94%4.97%4.82%4.99%5.54%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)53.10
(-) Cash Dividends Paid (M)35.80
(=) Cash Retained (M)17.30
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)10.626.643.98
Cash Retained (M)17.3017.3017.30
(-) Cash Required (M)-10.62-6.64-3.98
(=) Excess Retained (M)6.6810.6613.32
(/) Shares Outstanding (M)32.4832.4832.48
(=) Excess Retained per Share0.210.330.41
LTM Dividend per Share1.101.101.10
(+) Excess Retained per Share0.210.330.41
(=) Adjusted Dividend1.311.431.51
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$11.57$14.05$16.65
Upside / Downside16.73%41.77%68.06%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)53.1052.5752.0451.5251.0150.5052.01
Payout Ratio67.42%71.94%76.45%80.97%85.48%90.00%92.50%
Projected Dividends (M)35.8037.8139.7941.7243.6045.4548.11

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)34.3234.6735.02
Year 2 PV (M)32.7733.4434.12
Year 3 PV (M)31.1832.1433.12
Year 4 PV (M)29.5730.8032.06
Year 5 PV (M)27.9729.4330.95
PV of Terminal Value (M)487.03512.39538.80
Equity Value (M)642.84672.87704.07
Shares Outstanding (M)32.4832.4832.48
Fair Value$19.79$20.72$21.68
Upside / Downside99.72%109.05%118.74%

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