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Advanced Drainage Systems, Inc. (WMS)

Company Dividend Discount ModelIndustry: ConstructionSector: Industrials

Valuation Snapshot

Stable Growth$137.51 - $364.79$210.27
Multi-Stage$92.73 - $101.39$96.98
Blended Fair Value$153.63
Current Price$138.70
Upside10.76%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS-11.60%20.25%0.640.560.510.470.391.180.330.240.220.21
YoY Growth--13.05%11.06%6.99%20.66%-66.69%252.33%41.51%9.86%3.57%106.38%
Dividend Yield--0.55%0.36%0.45%0.53%0.34%2.39%1.03%0.83%1.07%0.76%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)458.33
(-) Cash Dividends Paid (M)52.91
(=) Cash Retained (M)405.42
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)91.6757.2934.37
Cash Retained (M)405.42405.42405.42
(-) Cash Required (M)-91.67-57.29-34.37
(=) Excess Retained (M)313.76348.13371.05
(/) Shares Outstanding (M)78.1878.1878.18
(=) Excess Retained per Share4.014.454.75
LTM Dividend per Share0.680.680.68
(+) Excess Retained per Share4.014.454.75
(=) Adjusted Dividend4.695.135.42
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$137.51$210.27$364.79
Upside / Downside-0.85%51.60%163.01%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)458.33488.12519.85553.64589.62627.95646.79
Payout Ratio11.54%27.23%42.93%58.62%74.31%90.00%92.50%
Projected Dividends (M)52.91132.94223.15324.53438.14565.15598.28

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)120.71121.85122.99
Year 2 PV (M)183.98187.48191.02
Year 3 PV (M)242.94249.92257.03
Year 4 PV (M)297.82309.28321.06
Year 5 PV (M)348.82365.66383.16
PV of Terminal Value (M)6,055.436,347.916,651.59
Equity Value (M)7,249.707,582.117,926.84
Shares Outstanding (M)78.1878.1878.18
Fair Value$92.73$96.98$101.39
Upside / Downside-33.14%-30.08%-26.90%

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