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Lamb Weston Holdings, Inc. (LW)

Company Dividend Discount ModelIndustry: Packaged FoodsSector: Consumer Defensive

Valuation Snapshot

Stable Growth$48.72 - $129.24$74.50
Multi-Stage$35.14 - $38.29$36.69
Blended Fair Value$55.59
Current Price$55.98
Upside-0.69%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS11.27%0.00%1.461.231.030.980.960.860.800.786.010.00
YoY Growth--18.91%19.10%5.56%2.29%11.54%7.06%2.81%-87.05%0.00%0.00%
Dividend Yield--2.61%1.97%1.07%1.22%1.48%1.36%1.16%1.14%13.39%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)294.10
(-) Cash Dividends Paid (M)206.90
(=) Cash Retained (M)87.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)58.8236.7622.06
Cash Retained (M)87.2087.2087.20
(-) Cash Required (M)-58.82-36.76-22.06
(=) Excess Retained (M)28.3850.4465.14
(/) Shares Outstanding (M)141.60141.60141.60
(=) Excess Retained per Share0.200.360.46
LTM Dividend per Share1.461.461.46
(+) Excess Retained per Share0.200.360.46
(=) Adjusted Dividend1.661.821.92
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$48.72$74.50$129.24
Upside / Downside-12.97%33.08%130.87%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)294.10313.22333.58355.26378.35402.94415.03
Payout Ratio70.35%74.28%78.21%82.14%86.07%90.00%92.50%
Projected Dividends (M)206.90232.66260.89291.81325.65362.65383.90

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)211.25213.26215.26
Year 2 PV (M)215.09219.19223.33
Year 3 PV (M)218.45224.72231.11
Year 4 PV (M)221.36229.87238.62
Year 5 PV (M)223.83234.64245.86
PV of Terminal Value (M)3,885.664,073.344,268.20
Equity Value (M)4,975.655,195.025,422.39
Shares Outstanding (M)141.60141.60141.60
Fair Value$35.14$36.69$38.29
Upside / Downside-37.23%-34.46%-31.59%

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