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Brookfield Finance Inc. 4.625% (BNH)

Company Dividend Discount ModelIndustry: Financial - Credit ServicesSector: Financial Services

Valuation Snapshot

Stable Growth$5.60 - $9.73$7.37
Multi-Stage$6.40 - $6.98$6.69
Blended Fair Value$7.03
Current Price$41.23
Upside-82.95%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-8.50%-0.90%0.210.190.370.570.390.330.310.290.270.25
YoY Growth--13.53%-50.40%-34.30%46.58%18.24%6.34%5.99%8.21%8.39%7.75%
Dividend Yield--0.60%0.67%1.72%1.85%1.60%2.05%1.80%2.09%2.04%2.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)996.00
(-) Cash Dividends Paid (M)702.33
(=) Cash Retained (M)293.67
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)199.20124.5074.70
Cash Retained (M)293.67293.67293.67
(-) Cash Required (M)-199.20-124.50-74.70
(=) Excess Retained (M)94.47169.17218.97
(/) Shares Outstanding (M)2,354.362,354.362,354.36
(=) Excess Retained per Share0.040.070.09
LTM Dividend per Share0.300.300.30
(+) Excess Retained per Share0.040.070.09
(=) Adjusted Dividend0.340.370.39
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate2.86%3.86%4.86%
Fair Value$5.60$7.37$9.73
Upside / Downside-86.42%-82.12%-76.39%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)996.001,034.491,074.461,115.981,159.101,203.891,240.00
Payout Ratio70.51%74.41%78.31%82.21%86.10%90.00%92.50%
Projected Dividends (M)702.33769.78841.40917.40998.021,083.501,147.00

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate2.86%3.86%4.86%
Year 1 PV (M)698.91705.70712.50
Year 2 PV (M)693.60707.15720.83
Year 3 PV (M)686.62706.84727.46
Year 4 PV (M)678.19704.95732.49
Year 5 PV (M)668.49701.62736.05
PV of Terminal Value (M)11,639.2912,216.1612,815.68
Equity Value (M)15,065.0915,742.4216,445.00
Shares Outstanding (M)2,354.362,354.362,354.36
Fair Value$6.40$6.69$6.98
Upside / Downside-84.48%-83.78%-83.06%

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