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Leonardo DRS, Inc. (DRS)

Company Dividend Discount ModelIndustry: Aerospace & DefenseSector: Industrials

Valuation Snapshot

Stable Growth$6.97 - $10.03$8.46
Multi-Stage$11.16 - $12.27$11.70
Blended Fair Value$10.08
Current Price$45.40
Upside-77.79%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018200820072006
DPS0.00%0.00%0.000.001.470.000.000.000.000.020.020.01
YoY Growth--0.00%-100.00%0.00%0.00%0.00%0.00%-100.00%-0.60%33.93%0.00%
Dividend Yield--0.00%0.00%11.37%0.00%0.00%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)265.00
(-) Cash Dividends Paid (M)55.00
(=) Cash Retained (M)210.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)53.0033.1319.88
Cash Retained (M)210.00210.00210.00
(-) Cash Required (M)-53.00-33.13-19.88
(=) Excess Retained (M)157.00176.88190.13
(/) Shares Outstanding (M)268.60268.60268.60
(=) Excess Retained per Share0.580.660.71
LTM Dividend per Share0.200.200.20
(+) Excess Retained per Share0.580.660.71
(=) Adjusted Dividend0.790.860.91
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$6.97$8.46$10.03
Upside / Downside-84.65%-81.36%-77.91%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)265.00262.35259.73257.13254.56252.01259.57
Payout Ratio20.75%34.60%48.45%62.30%76.15%90.00%92.50%
Projected Dividends (M)55.0090.78125.84160.20193.85226.81240.10

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)82.3783.2184.05
Year 2 PV (M)103.61105.73107.88
Year 3 PV (M)119.67123.37127.14
Year 4 PV (M)131.39136.83142.45
Year 5 PV (M)139.49146.75154.31
PV of Terminal Value (M)2,421.502,547.592,678.88
Equity Value (M)2,998.023,143.493,294.72
Shares Outstanding (M)268.60268.60268.60
Fair Value$11.16$11.70$12.27
Upside / Downside-75.41%-74.22%-72.98%

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