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Dril-Quip, Inc. (DRQ)

Company Dividend Discount ModelIndustry: Oil & Gas Equipment & ServicesSector: Energy

Valuation Snapshot

Stable Growth$17.55 - $25.26$21.31
Multi-Stage$29.30 - $32.13$30.69
Blended Fair Value$26.00
Current Price$15.41
Upside68.73%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.00%0.00%1.250.000.000.000.000.000.000.000.000.00
YoY Growth--0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--8.12%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)148.87
(-) Cash Dividends Paid (M)74.98
(=) Cash Retained (M)73.88
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)29.7718.6111.16
Cash Retained (M)73.8873.8873.88
(-) Cash Required (M)-29.77-18.61-11.16
(=) Excess Retained (M)44.1155.2762.72
(/) Shares Outstanding (M)59.9259.9259.92
(=) Excess Retained per Share0.740.921.05
LTM Dividend per Share1.251.251.25
(+) Excess Retained per Share0.740.921.05
(=) Adjusted Dividend1.992.172.30
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$17.55$21.31$25.26
Upside / Downside13.90%38.31%63.92%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)148.87147.38145.90144.44143.00141.57145.82
Payout Ratio50.37%58.30%66.22%74.15%82.07%90.00%92.50%
Projected Dividends (M)74.9885.9196.62107.10117.37127.41134.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)77.9578.7579.55
Year 2 PV (M)79.5481.1882.82
Year 3 PV (M)80.0182.4885.00
Year 4 PV (M)79.5582.8586.24
Year 5 PV (M)78.3682.4486.69
PV of Terminal Value (M)1,360.291,431.121,504.87
Equity Value (M)1,755.701,838.811,925.18
Shares Outstanding (M)59.9259.9259.92
Fair Value$29.30$30.69$32.13
Upside / Downside90.15%99.15%108.51%

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