Definitive Analysis
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Xylem Inc. (0M29.L)

Company Dividend Discount ModelIndustry: Industrial - Capital GoodsSector: Industrials

Valuation Snapshot

Stable Growth$91.18 - $241.87$139.42
Multi-Stage$63.56 - $69.38$66.42
Blended Fair Value$102.92
Current Price$147.50
Upside-30.22%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS15.00%14.05%1.441.230.890.830.770.710.620.530.460.42
YoY Growth--17.06%37.79%6.90%7.98%8.05%14.47%16.92%16.07%9.80%8.51%
Dividend Yield--1.20%0.95%0.85%0.98%0.73%1.10%0.77%0.69%0.91%1.02%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)948.00
(-) Cash Dividends Paid (M)380.00
(=) Cash Retained (M)568.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)189.60118.5071.10
Cash Retained (M)568.00568.00568.00
(-) Cash Required (M)-189.60-118.50-71.10
(=) Excess Retained (M)378.40449.50496.90
(/) Shares Outstanding (M)243.89243.89243.89
(=) Excess Retained per Share1.551.842.04
LTM Dividend per Share1.561.561.56
(+) Excess Retained per Share1.551.842.04
(=) Adjusted Dividend3.113.403.60
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$91.18$139.42$241.87
Upside / Downside-38.18%-5.48%63.98%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)948.001,009.621,075.251,145.141,219.571,298.841,337.81
Payout Ratio40.08%50.07%60.05%70.03%80.02%90.00%92.50%
Projected Dividends (M)380.00505.49645.69801.98975.861,168.961,237.47

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)458.99463.34467.69
Year 2 PV (M)532.35542.49552.73
Year 3 PV (M)600.38617.61635.17
Year 4 PV (M)663.33688.84715.08
Year 5 PV (M)721.49756.34792.52
PV of Terminal Value (M)12,525.0113,129.9813,758.09
Equity Value (M)15,501.5516,198.5916,921.28
Shares Outstanding (M)243.89243.89243.89
Fair Value$63.56$66.42$69.38
Upside / Downside-56.91%-54.97%-52.96%

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