Definitive Analysis
Definitive Analysis

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Lincoln National Corporation (LNC)

Company Dividend Discount ModelIndustry: Insurance - LifeSector: Financial Services

Valuation Snapshot

Stable Growth$94.88 - $140.12$116.55
Multi-Stage$114.95 - $125.92$120.33
Blended Fair Value$118.44
Current Price$40.33
Upside193.68%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.26%6.09%1.701.691.721.761.721.681.601.451.321.13
YoY Growth--0.66%-1.61%-2.82%2.57%2.64%4.84%10.31%10.08%16.67%20.00%
Dividend Yield--4.73%5.34%7.63%2.70%2.76%6.37%2.58%1.98%2.01%2.88%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,109.00
(-) Cash Dividends Paid (M)316.00
(=) Cash Retained (M)1,793.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)421.80263.63158.18
Cash Retained (M)1,793.001,793.001,793.00
(-) Cash Required (M)-421.80-263.63-158.18
(=) Excess Retained (M)1,371.201,529.381,634.83
(/) Shares Outstanding (M)180.75180.75180.75
(=) Excess Retained per Share7.598.469.04
LTM Dividend per Share1.751.751.75
(+) Excess Retained per Share7.598.469.04
(=) Adjusted Dividend9.3310.2110.79
WACC / Discount Rate10.76%10.76%10.76%
Growth Rate0.84%1.84%2.84%
Fair Value$94.88$116.55$140.12
Upside / Downside135.25%188.98%247.44%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,109.002,147.872,187.462,227.782,268.842,310.662,379.98
Payout Ratio14.98%29.99%44.99%59.99%75.00%90.00%92.50%
Projected Dividends (M)316.00644.08984.141,336.521,701.562,079.602,201.48

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate10.76%10.76%10.76%
Growth Rate0.84%1.84%2.84%
Year 1 PV (M)575.77581.48587.19
Year 2 PV (M)786.47802.15817.98
Year 3 PV (M)954.81983.491,012.75
Year 4 PV (M)1,086.671,130.421,175.48
Year 5 PV (M)1,187.261,247.301,309.75
PV of Terminal Value (M)16,186.5417,005.1817,856.60
Equity Value (M)20,777.5221,750.0222,759.75
Shares Outstanding (M)180.75180.75180.75
Fair Value$114.95$120.33$125.92
Upside / Downside185.03%198.37%212.22%

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