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Virtus Diversified Income & Convertible Fund (ACV)

Company Dividend Discount ModelIndustry: Asset Management - IncomeSector: Financial Services

Valuation Snapshot

Stable Growth$49.36 - $71.07$59.95
Multi-Stage$85.05 - $93.12$89.01
Blended Fair Value$74.48
Current Price$22.65
Upside228.83%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS2.33%0.00%2.152.332.357.762.361.911.911.992.001.07
YoY Growth---7.90%-0.96%-69.69%228.49%23.57%0.33%-4.01%-0.84%87.62%0.00%
Dividend Yield--9.36%10.38%10.40%27.97%7.12%7.58%8.95%8.86%10.27%6.39%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)72.36
(-) Cash Dividends Paid (M)52.58
(=) Cash Retained (M)19.79
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)14.479.055.43
Cash Retained (M)19.7919.7919.79
(-) Cash Required (M)-14.47-9.05-5.43
(=) Excess Retained (M)5.3110.7414.36
(/) Shares Outstanding (M)10.3710.3710.37
(=) Excess Retained per Share0.511.041.38
LTM Dividend per Share5.075.075.07
(+) Excess Retained per Share0.511.041.38
(=) Adjusted Dividend5.586.106.45
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$49.36$59.95$71.07
Upside / Downside117.93%164.69%213.76%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)72.3671.6470.9270.2169.5168.8270.88
Payout Ratio72.66%76.12%79.59%83.06%86.53%90.00%92.50%
Projected Dividends (M)52.5854.5456.4558.3260.1561.9465.57

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)49.4950.0050.50
Year 2 PV (M)46.4947.4448.41
Year 3 PV (M)43.5944.9446.31
Year 4 PV (M)40.8042.4944.23
Year 5 PV (M)38.1240.1142.17
PV of Terminal Value (M)663.74698.30734.29
Equity Value (M)882.22923.27965.91
Shares Outstanding (M)10.3710.3710.37
Fair Value$85.05$89.01$93.12
Upside / Downside275.50%292.97%311.12%

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