Definitive Analysis
Definitive Analysis

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CDW Corporation (CDW)

Company Dividend Discount ModelIndustry: Information Technology ServicesSector: Technology

Valuation Snapshot

Stable Growth$148.11 - $315.27$210.54
Multi-Stage$119.15 - $130.08$124.51
Blended Fair Value$167.53
Current Price$159.28
Upside5.18%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS12.61%25.75%2.502.422.121.771.651.381.050.800.590.40
YoY Growth--3.30%13.77%20.36%6.92%19.74%31.56%30.40%35.83%48.77%57.44%
Dividend Yield--1.56%0.96%1.09%0.99%1.00%1.48%1.06%1.14%1.03%0.96%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,051.30
(-) Cash Dividends Paid (M)413.30
(=) Cash Retained (M)638.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)210.26131.4178.85
Cash Retained (M)638.00638.00638.00
(-) Cash Required (M)-210.26-131.41-78.85
(=) Excess Retained (M)427.74506.59559.15
(/) Shares Outstanding (M)133.03133.03133.03
(=) Excess Retained per Share3.223.814.20
LTM Dividend per Share3.113.113.11
(+) Excess Retained per Share3.223.814.20
(=) Adjusted Dividend6.326.927.31
WACC / Discount Rate9.42%9.42%9.42%
Growth Rate4.94%5.94%6.94%
Fair Value$148.11$210.54$315.27
Upside / Downside-7.01%32.18%97.94%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,051.301,113.801,180.011,250.151,324.471,403.201,445.30
Payout Ratio39.31%49.45%59.59%69.73%79.86%90.00%92.50%
Projected Dividends (M)413.30550.78703.14871.671,057.761,262.881,336.90

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.42%9.42%9.42%
Growth Rate4.94%5.94%6.94%
Year 1 PV (M)498.59503.34508.09
Year 2 PV (M)576.21587.24598.38
Year 3 PV (M)646.63665.29684.31
Year 4 PV (M)710.32737.79766.04
Year 5 PV (M)767.71805.00843.71
PV of Terminal Value (M)12,650.5013,264.8213,902.78
Equity Value (M)15,849.9616,563.4717,303.30
Shares Outstanding (M)133.03133.03133.03
Fair Value$119.15$124.51$130.08
Upside / Downside-25.19%-21.83%-18.34%

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