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Eastman Chemical Company (EMN)

Company Dividend Discount ModelIndustry: Chemicals - SpecialtySector: Basic Materials

Valuation Snapshot

Stable Growth$46.24 - $67.79$56.61
Multi-Stage$73.83 - $80.88$77.29
Blended Fair Value$66.95
Current Price$63.05
Upside6.19%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.02%6.08%3.243.223.263.213.062.942.722.532.332.04
YoY Growth--0.80%-1.31%1.60%4.75%4.37%7.86%7.43%8.82%14.29%13.33%
Dividend Yield--3.68%3.21%3.87%2.86%2.78%6.30%3.47%2.40%2.88%2.82%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)699.00
(-) Cash Dividends Paid (M)380.00
(=) Cash Retained (M)319.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)139.8087.3852.43
Cash Retained (M)319.00319.00319.00
(-) Cash Required (M)-139.80-87.38-52.43
(=) Excess Retained (M)179.20231.63266.58
(/) Shares Outstanding (M)116.85116.85116.85
(=) Excess Retained per Share1.531.982.28
LTM Dividend per Share3.253.253.25
(+) Excess Retained per Share1.531.982.28
(=) Adjusted Dividend4.795.235.53
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.13%-0.13%0.87%
Fair Value$46.24$56.61$67.79
Upside / Downside-26.67%-10.21%7.52%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)699.00698.06697.11696.17695.23694.30715.12
Payout Ratio54.36%61.49%68.62%75.75%82.87%90.00%92.50%
Projected Dividends (M)380.00429.24478.35527.32576.16624.87661.49

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.13%-0.13%0.87%
Year 1 PV (M)389.50393.44397.38
Year 2 PV (M)393.88401.89409.98
Year 3 PV (M)394.01406.09418.41
Year 4 PV (M)390.65406.70423.24
Year 5 PV (M)384.46404.30424.95
PV of Terminal Value (M)6,674.197,018.637,377.14
Equity Value (M)8,626.709,031.069,451.11
Shares Outstanding (M)116.85116.85116.85
Fair Value$73.83$77.29$80.88
Upside / Downside17.09%22.58%28.28%

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