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Equitrans Midstream Corporation (ETRN)

Company Dividend Discount ModelIndustry: Oil & Gas MidstreamSector: Energy

Valuation Snapshot

Stable Growth$7.33 - $10.55$8.90
Multi-Stage$12.58 - $13.77$13.16
Blended Fair Value$11.03
Current Price$12.82
Upside-13.97%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202320222021202020192018201720162015
DPS0.00%0.00%0.720.720.720.811.130.000.000.000.000.00
YoY Growth--0.08%0.05%-10.97%-28.07%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--5.77%12.51%8.56%9.94%22.43%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)455.69
(-) Cash Dividends Paid (M)318.59
(=) Cash Retained (M)137.10
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)91.1456.9634.18
Cash Retained (M)137.10137.10137.10
(-) Cash Required (M)-91.14-56.96-34.18
(=) Excess Retained (M)45.9680.14102.92
(/) Shares Outstanding (M)440.18440.18440.18
(=) Excess Retained per Share0.100.180.23
LTM Dividend per Share0.720.720.72
(+) Excess Retained per Share0.100.180.23
(=) Adjusted Dividend0.830.910.96
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$7.33$8.90$10.55
Upside / Downside-42.86%-30.60%-17.74%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)455.69451.13446.62442.16437.73433.36446.36
Payout Ratio69.91%73.93%77.95%81.97%85.98%90.00%92.50%
Projected Dividends (M)318.59333.53348.13362.42376.38390.02412.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)302.68305.76308.85
Year 2 PV (M)286.71292.59298.53
Year 3 PV (M)270.86279.24287.78
Year 4 PV (M)255.27265.85276.76
Year 5 PV (M)240.06252.56265.57
PV of Terminal Value (M)4,179.744,397.394,624.01
Equity Value (M)5,535.325,793.396,061.51
Shares Outstanding (M)440.18440.18440.18
Fair Value$12.58$13.16$13.77
Upside / Downside-1.91%2.66%7.41%

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