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Rent-A-Center, Inc. (RCII)

Company Dividend Discount ModelIndustry: Rental & Leasing ServicesSector: Industrials

Valuation Snapshot

Stable Growth$33.07 - $60.04$44.29
Multi-Stage$35.59 - $38.82$37.17
Blended Fair Value$40.73
Current Price$26.78
Upside52.10%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS43.12%5.39%1.450.001.391.261.110.240.000.230.450.90
YoY Growth--0.00%-100.00%10.74%13.29%360.49%0.00%-100.00%-49.87%-49.90%4.83%
Dividend Yield--5.41%0.00%5.20%4.99%1.93%1.71%0.00%2.61%5.07%5.66%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)129.65
(-) Cash Dividends Paid (M)103.69
(=) Cash Retained (M)25.96
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)25.9316.219.72
Cash Retained (M)25.9625.9625.96
(-) Cash Required (M)-25.93-16.21-9.72
(=) Excess Retained (M)0.039.7516.23
(/) Shares Outstanding (M)56.8556.8556.85
(=) Excess Retained per Share0.000.170.29
LTM Dividend per Share1.821.821.82
(+) Excess Retained per Share0.000.170.29
(=) Adjusted Dividend1.822.002.11
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.39%4.39%5.39%
Fair Value$33.07$44.29$60.04
Upside / Downside23.50%65.39%124.18%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)129.65135.34141.29147.50153.99160.75165.58
Payout Ratio79.98%81.98%83.99%85.99%88.00%90.00%92.50%
Projected Dividends (M)103.69110.96118.67126.84135.50144.68153.16

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate3.39%4.39%5.39%
Year 1 PV (M)100.73101.71102.68
Year 2 PV (M)97.8099.70101.62
Year 3 PV (M)94.9097.68100.51
Year 4 PV (M)92.0495.6599.37
Year 5 PV (M)89.2193.6198.18
PV of Terminal Value (M)1,548.691,625.051,704.39
Equity Value (M)2,023.382,113.402,206.75
Shares Outstanding (M)56.8556.8556.85
Fair Value$35.59$37.17$38.82
Upside / Downside32.90%38.81%44.94%

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