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LKQ Corporation (LKQ)

Company Dividend Discount ModelIndustry: Auto - PartsSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$26.20 - $40.73$32.92
Multi-Stage$35.95 - $39.36$37.62
Blended Fair Value$35.27
Current Price$30.54
Upside15.49%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.00%0.00%1.231.171.100.000.000.000.000.000.000.00
YoY Growth--5.30%6.34%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--2.89%2.19%1.93%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)697.00
(-) Cash Dividends Paid (M)312.00
(=) Cash Retained (M)385.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)139.4087.1352.28
Cash Retained (M)385.00385.00385.00
(-) Cash Required (M)-139.40-87.13-52.28
(=) Excess Retained (M)245.60297.88332.73
(/) Shares Outstanding (M)258.93258.93258.93
(=) Excess Retained per Share0.951.151.29
LTM Dividend per Share1.201.201.20
(+) Excess Retained per Share0.951.151.29
(=) Adjusted Dividend2.152.362.49
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.80%1.80%2.80%
Fair Value$26.20$32.92$40.73
Upside / Downside-14.20%7.78%33.37%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)697.00709.52722.26735.23748.44761.88784.74
Payout Ratio44.76%53.81%62.86%71.91%80.95%90.00%92.50%
Projected Dividends (M)312.00381.80454.00528.67605.88685.69725.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate0.80%1.80%2.80%
Year 1 PV (M)346.58350.01353.45
Year 2 PV (M)374.10381.56389.09
Year 3 PV (M)395.45407.33419.46
Year 4 PV (M)411.39427.96445.03
Year 5 PV (M)422.64444.02466.26
PV of Terminal Value (M)7,358.667,731.018,118.27
Equity Value (M)9,308.829,741.9010,191.57
Shares Outstanding (M)258.93258.93258.93
Fair Value$35.95$37.62$39.36
Upside / Downside17.72%23.20%28.88%

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