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Miller/Howard High Income Equity Fund (HIE)

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

Valuation Snapshot

Stable Growth$8.71 - $12.53$10.57
Multi-Stage$15.49 - $16.93$16.20
Blended Fair Value$13.38
Current Price$10.94
Upside22.34%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017
DPS-9.83%0.00%0.610.580.600.801.201.030.990.000.000.00
YoY Growth--5.70%-3.50%-24.98%-33.37%16.88%3.77%0.00%0.00%0.00%0.00%
Dividend Yield--6.38%5.72%5.74%13.37%10.18%9.27%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)23.03
(-) Cash Dividends Paid (M)22.60
(=) Cash Retained (M)0.44
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)4.612.881.73
Cash Retained (M)0.440.440.44
(-) Cash Required (M)-4.61-2.88-1.73
(=) Excess Retained (M)-4.17-2.44-1.29
(/) Shares Outstanding (M)18.6918.6918.69
(=) Excess Retained per Share-0.22-0.13-0.07
LTM Dividend per Share1.211.211.21
(+) Excess Retained per Share-0.22-0.13-0.07
(=) Adjusted Dividend0.991.081.14
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$8.71$10.57$12.53
Upside / Downside-20.42%-3.37%14.53%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)23.0322.8022.5822.3522.1321.9022.56
Payout Ratio98.11%96.48%94.86%93.24%91.62%90.00%92.50%
Projected Dividends (M)22.6022.0021.4220.8420.2719.7120.87

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)19.9620.1720.37
Year 2 PV (M)17.6317.9918.36
Year 3 PV (M)15.5716.0516.54
Year 4 PV (M)13.7414.3114.90
Year 5 PV (M)12.1212.7613.41
PV of Terminal Value (M)210.47221.43232.84
Equity Value (M)289.50302.71316.42
Shares Outstanding (M)18.6918.6918.69
Fair Value$15.49$16.20$16.93
Upside / Downside41.58%48.04%54.75%

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