Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

InterContinental Hotels Group PLC (IHG.L)

Company Dividend Discount ModelIndustry: Travel LodgingSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$93.00 - $151.32$119.13
Multi-Stage$185.26 - $203.78$194.34
Blended Fair Value$156.74
Current Price$114.02
Upside37.46%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-18.52%-12.11%1.591.501.430.000.004.421.223.6410.391.15
YoY Growth--5.71%5.15%0.00%0.00%-100.00%262.31%-66.44%-64.97%800.53%-80.04%
Dividend Yield--1.28%1.67%2.49%0.00%0.00%6.41%2.26%5.72%23.16%2.95%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,388.00
(-) Cash Dividends Paid (M)518.00
(=) Cash Retained (M)870.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)277.60173.50104.10
Cash Retained (M)870.00870.00870.00
(-) Cash Required (M)-277.60-173.50-104.10
(=) Excess Retained (M)592.40696.50765.90
(/) Shares Outstanding (M)162.95162.95162.95
(=) Excess Retained per Share3.644.274.70
LTM Dividend per Share3.183.183.18
(+) Excess Retained per Share3.644.274.70
(=) Adjusted Dividend6.817.457.88
WACC / Discount Rate6.52%6.52%6.52%
Growth Rate-0.75%0.25%1.25%
Fair Value$93.00$119.13$151.32
Upside / Downside-18.43%4.48%32.72%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,388.001,391.441,394.891,398.351,401.821,405.291,447.45
Payout Ratio37.32%47.86%58.39%68.93%79.46%90.00%92.50%
Projected Dividends (M)518.00665.89814.50963.851,113.941,264.761,338.89

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.52%6.52%6.52%
Growth Rate-0.75%0.25%1.25%
Year 1 PV (M)618.90625.13631.37
Year 2 PV (M)703.60717.85732.24
Year 3 PV (M)773.86797.49821.59
Year 4 PV (M)831.24865.26900.30
Year 5 PV (M)877.19922.28969.21
PV of Terminal Value (M)26,384.5227,740.8029,152.29
Equity Value (M)30,189.3131,668.8033,207.00
Shares Outstanding (M)162.95162.95162.95
Fair Value$185.26$194.34$203.78
Upside / Downside62.48%70.45%78.72%

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