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The Interpublic Group of Companies, Inc. (IPG)

Company Dividend Discount ModelIndustry: Advertising AgenciesSector: Communication Services

Valuation Snapshot

Stable Growth$16.34 - $26.45$20.88
Multi-Stage$22.19 - $24.22$23.18
Blended Fair Value$22.03
Current Price$24.48
Upside-9.99%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.46%12.06%1.331.291.231.151.070.970.860.750.640.52
YoY Growth--3.63%4.77%6.92%7.44%9.64%12.73%14.91%17.58%21.94%22.96%
Dividend Yield--4.90%3.96%3.29%3.24%3.66%6.02%4.08%3.27%2.60%2.29%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)551.60
(-) Cash Dividends Paid (M)489.40
(=) Cash Retained (M)62.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)110.3268.9541.37
Cash Retained (M)62.2062.2062.20
(-) Cash Required (M)-110.32-68.95-41.37
(=) Excess Retained (M)-48.12-6.7520.83
(/) Shares Outstanding (M)372.70372.70372.70
(=) Excess Retained per Share-0.13-0.020.06
LTM Dividend per Share1.311.311.31
(+) Excess Retained per Share-0.13-0.020.06
(=) Adjusted Dividend1.181.301.37
WACC / Discount Rate8.92%8.92%8.92%
Growth Rate1.56%2.56%3.56%
Fair Value$16.34$20.88$26.45
Upside / Downside-33.26%-14.69%8.05%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)551.60565.71580.18595.02610.25625.86644.63
Payout Ratio88.72%88.98%89.23%89.49%89.74%90.00%92.50%
Projected Dividends (M)489.40503.36517.72532.48547.66563.27596.29

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.92%8.92%8.92%
Growth Rate1.56%2.56%3.56%
Year 1 PV (M)457.64462.15466.66
Year 2 PV (M)427.94436.41444.96
Year 3 PV (M)400.17412.10424.28
Year 4 PV (M)374.19389.15404.55
Year 5 PV (M)349.90367.47385.74
PV of Terminal Value (M)6,258.946,573.226,899.99
Equity Value (M)8,268.788,640.509,026.17
Shares Outstanding (M)372.70372.70372.70
Fair Value$22.19$23.18$24.22
Upside / Downside-9.37%-5.30%-1.07%

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