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California Water Service Group (CWT)

Company Dividend Discount ModelIndustry: Regulated WaterSector: Utilities

Valuation Snapshot

Stable Growth$54.16 - $144.59$82.98
Multi-Stage$38.25 - $41.73$39.96
Blended Fair Value$61.47
Current Price$45.89
Upside33.95%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.48%7.74%1.100.990.910.800.700.640.610.580.560.54
YoY Growth--10.88%8.95%14.32%13.48%9.85%5.49%4.28%4.48%3.17%3.23%
Dividend Yield--2.28%2.14%1.57%1.35%1.25%1.27%1.15%1.56%1.55%2.02%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)136.39
(-) Cash Dividends Paid (M)72.63
(=) Cash Retained (M)63.76
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)27.2817.0510.23
Cash Retained (M)63.7663.7663.76
(-) Cash Required (M)-27.28-17.05-10.23
(=) Excess Retained (M)36.4846.7153.53
(/) Shares Outstanding (M)59.3659.3659.36
(=) Excess Retained per Share0.610.790.90
LTM Dividend per Share1.221.221.22
(+) Excess Retained per Share0.610.790.90
(=) Adjusted Dividend1.842.012.13
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$54.16$82.98$144.59
Upside / Downside18.03%80.83%215.09%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)136.39145.25154.69164.75175.46186.86192.47
Payout Ratio53.25%60.60%67.95%75.30%82.65%90.00%92.50%
Projected Dividends (M)72.6388.02105.12124.06145.02168.18178.03

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)79.9480.7081.46
Year 2 PV (M)86.6988.3490.01
Year 3 PV (M)92.9295.5898.30
Year 4 PV (M)98.64102.43106.33
Year 5 PV (M)103.89108.90114.11
PV of Terminal Value (M)1,808.791,896.161,986.86
Equity Value (M)2,270.862,372.122,477.08
Shares Outstanding (M)59.3659.3659.36
Fair Value$38.25$39.96$41.73
Upside / Downside-16.64%-12.92%-9.07%

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