Definitive Analysis
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Parker-Hannifin Corporation (PH)

Company Dividend Discount ModelIndustry: Industrial - MachinerySector: Industrials

Valuation Snapshot

Stable Growth$658.28 - $1,746.25$1,006.59
Multi-Stage$450.51 - $492.22$470.99
Blended Fair Value$738.79
Current Price$758.15
Upside-2.55%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS13.66%9.72%6.646.035.434.393.663.503.182.822.662.64
YoY Growth--10.10%11.08%23.55%19.93%4.70%10.03%12.92%5.76%1.00%0.46%
Dividend Yield--0.88%0.95%1.39%1.81%1.31%1.73%1.76%1.52%1.52%2.10%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)3,640.58
(-) Cash Dividends Paid (M)879.06
(=) Cash Retained (M)2,761.52
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)728.12455.07273.04
Cash Retained (M)2,761.522,761.522,761.52
(-) Cash Required (M)-728.12-455.07-273.04
(=) Excess Retained (M)2,033.402,306.442,488.47
(/) Shares Outstanding (M)129.73129.73129.73
(=) Excess Retained per Share15.6717.7819.18
LTM Dividend per Share6.786.786.78
(+) Excess Retained per Share15.6717.7819.18
(=) Adjusted Dividend22.4524.5625.96
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$658.28$1,006.59$1,746.25
Upside / Downside-13.17%32.77%130.33%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)3,640.583,877.224,129.244,397.644,683.484,987.915,137.55
Payout Ratio24.15%37.32%50.49%63.66%76.83%90.00%92.50%
Projected Dividends (M)879.061,446.862,084.762,799.473,598.294,489.124,752.23

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)1,313.751,326.201,338.66
Year 2 PV (M)1,718.811,751.551,784.60
Year 3 PV (M)2,095.722,155.882,217.19
Year 4 PV (M)2,445.912,539.972,636.72
Year 5 PV (M)2,770.712,904.543,043.49
PV of Terminal Value (M)48,099.4950,422.7152,834.85
Equity Value (M)58,444.3961,100.8663,855.49
Shares Outstanding (M)129.73129.73129.73
Fair Value$450.51$470.99$492.22
Upside / Downside-40.58%-37.88%-35.08%

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