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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$11.55 - $16.62$14.02
Multi-Stage$19.73 - $21.61$20.65
Blended Fair Value$17.34
Current Price$9.91
Upside74.97%
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 Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$11.55$14.02$16.62
Upside / Downside16.54%41.52%67.72%

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 Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)34.3134.6635.01
Year 2 PV (M)32.7633.4334.11
Year 3 PV (M)31.1632.1333.11
Year 4 PV (M)29.5530.7832.04
Year 5 PV (M)27.9529.4030.92
PV of Terminal Value (M)485.19510.46536.77
Equity Value (M)640.92670.86701.95
Shares Outstanding (M)32.4832.4832.48
Fair Value$19.73$20.65$21.61
Upside / Downside99.13%108.42%118.09%

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