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Plains All American Pipeline, L.P. (PAA)

Company Dividend Discount ModelIndustry: Oil & Gas MidstreamSector: Energy

Valuation Snapshot

Stable Growth$11.79 - $17.14$14.38
Multi-Stage$23.08 - $25.28$24.16
Blended Fair Value$19.27
Current Price$17.06
Upside12.96%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-2.36%-0.47%1.271.060.830.730.931.431.241.971.511.54
YoY Growth--19.12%28.08%12.96%-21.07%-34.76%15.27%-37.16%30.51%-1.76%15.74%
Dividend Yield--6.33%6.00%6.65%6.83%10.23%27.02%5.01%8.94%4.77%7.33%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,130.00
(-) Cash Dividends Paid (M)1,025.00
(=) Cash Retained (M)105.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)226.00141.2584.75
Cash Retained (M)105.00105.00105.00
(-) Cash Required (M)-226.00-141.25-84.75
(=) Excess Retained (M)-121.00-36.2520.25
(/) Shares Outstanding (M)703.75703.75703.75
(=) Excess Retained per Share-0.17-0.050.03
LTM Dividend per Share1.461.461.46
(+) Excess Retained per Share-0.17-0.050.03
(=) Adjusted Dividend1.281.401.49
WACC / Discount Rate8.15%8.15%8.15%
Growth Rate-2.47%-1.47%-0.47%
Fair Value$11.79$14.38$17.14
Upside / Downside-30.87%-15.68%0.48%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,130.001,113.391,097.021,080.891,065.001,049.341,080.82
Payout Ratio90.71%90.57%90.42%90.28%90.14%90.00%92.50%
Projected Dividends (M)1,025.001,008.35991.98975.86960.01944.41999.76

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.15%8.15%8.15%
Growth Rate-2.47%-1.47%-0.47%
Year 1 PV (M)922.87932.34941.80
Year 2 PV (M)830.92848.05865.35
Year 3 PV (M)748.13771.38795.11
Year 4 PV (M)673.59701.64730.56
Year 5 PV (M)606.47638.20671.25
PV of Terminal Value (M)12,458.1413,110.0613,788.99
Equity Value (M)16,240.1217,001.6717,793.06
Shares Outstanding (M)703.75703.75703.75
Fair Value$23.08$24.16$25.28
Upside / Downside35.27%41.61%48.20%

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