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Tractor Supply Company (TSCO)

Company Dividend Discount ModelIndustry: Specialty RetailSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$48.48 - $128.61$74.13
Multi-Stage$33.94 - $37.04$35.46
Blended Fair Value$54.80
Current Price$56.52
Upside-3.05%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS23.77%18.84%0.880.840.770.450.330.300.280.250.230.19
YoY Growth--5.09%9.77%71.38%36.84%7.35%10.61%9.91%9.45%18.59%22.65%
Dividend Yield--1.65%1.61%1.63%0.96%0.91%1.83%1.41%1.99%1.66%1.09%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,105.09
(-) Cash Dividends Paid (M)483.55
(=) Cash Retained (M)621.53
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)221.02138.1482.88
Cash Retained (M)621.53621.53621.53
(-) Cash Required (M)-221.02-138.14-82.88
(=) Excess Retained (M)400.51483.40538.65
(/) Shares Outstanding (M)534.69534.69534.69
(=) Excess Retained per Share0.750.901.01
LTM Dividend per Share0.900.900.90
(+) Excess Retained per Share0.750.901.01
(=) Adjusted Dividend1.651.811.91
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$48.48$74.13$128.61
Upside / Downside-14.22%31.16%127.54%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,105.091,176.921,253.421,334.891,421.661,514.061,559.49
Payout Ratio43.76%53.01%62.25%71.50%80.75%90.00%92.50%
Projected Dividends (M)483.55623.83780.31954.481,148.011,362.661,442.52

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)566.44571.81577.18
Year 2 PV (M)643.33655.59667.96
Year 3 PV (M)714.54735.05755.95
Year 4 PV (M)780.35810.36841.23
Year 5 PV (M)841.04881.66923.84
PV of Terminal Value (M)14,600.4415,305.6516,037.84
Equity Value (M)18,146.1518,960.1219,804.00
Shares Outstanding (M)534.69534.69534.69
Fair Value$33.94$35.46$37.04
Upside / Downside-39.95%-37.26%-34.47%

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