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Humana Inc. (HUM)

Company Dividend Discount ModelIndustry: Medical - Healthcare PlansSector: Healthcare

Valuation Snapshot

Stable Growth$250.77 - $665.22$383.45
Multi-Stage$173.44 - $189.39$181.27
Blended Fair Value$282.36
Current Price$260.17
Upside8.53%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.17%9.62%3.573.573.252.932.672.412.191.821.471.42
YoY Growth--0.00%9.95%10.73%9.60%11.00%9.81%20.45%24.29%2.91%0.00%
Dividend Yield--1.35%1.02%0.67%0.67%0.64%0.77%0.82%0.68%0.71%0.78%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,291.00
(-) Cash Dividends Paid (M)429.00
(=) Cash Retained (M)862.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)258.20161.3896.83
Cash Retained (M)862.00862.00862.00
(-) Cash Required (M)-258.20-161.38-96.83
(=) Excess Retained (M)603.80700.63765.18
(/) Shares Outstanding (M)120.76120.76120.76
(=) Excess Retained per Share5.005.806.34
LTM Dividend per Share3.553.553.55
(+) Excess Retained per Share5.005.806.34
(=) Adjusted Dividend8.559.359.89
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$250.77$383.45$665.22
Upside / Downside-3.61%47.39%155.69%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,291.001,374.921,464.281,559.461,660.831,768.781,821.85
Payout Ratio33.23%44.58%55.94%67.29%78.65%90.00%92.50%
Projected Dividends (M)429.00612.99819.091,049.391,306.181,591.901,685.21

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)556.60561.87567.15
Year 2 PV (M)675.31688.18701.16
Year 3 PV (M)785.59808.14831.12
Year 4 PV (M)887.86922.01957.13
Year 5 PV (M)982.531,029.991,079.26
PV of Terminal Value (M)17,056.7417,880.5918,735.97
Equity Value (M)20,944.6421,890.7822,871.79
Shares Outstanding (M)120.76120.76120.76
Fair Value$173.44$181.27$189.39
Upside / Downside-33.34%-30.33%-27.20%

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