Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Westinghouse Air Brake Technologies Corporation (WAB)

Company Dividend Discount ModelIndustry: RailroadsSector: Industrials

Valuation Snapshot

Stable Growth$157.39 - $404.72$238.35
Multi-Stage$107.38 - $117.38$112.29
Blended Fair Value$175.32
Current Price$200.47
Upside-12.55%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.37%21.95%0.820.720.650.540.540.480.270.250.190.16
YoY Growth--13.82%10.81%20.65%-0.54%13.22%76.55%9.61%30.18%20.28%40.10%
Dividend Yield--0.45%0.50%0.64%0.56%0.68%0.99%0.36%0.30%0.24%0.20%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,180.00
(-) Cash Dividends Paid (M)164.00
(=) Cash Retained (M)1,016.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)236.00147.5088.50
Cash Retained (M)1,016.001,016.001,016.00
(-) Cash Required (M)-236.00-147.50-88.50
(=) Excess Retained (M)780.00868.50927.50
(/) Shares Outstanding (M)171.43171.43171.43
(=) Excess Retained per Share4.555.075.41
LTM Dividend per Share0.960.960.96
(+) Excess Retained per Share4.555.075.41
(=) Adjusted Dividend5.516.026.37
WACC / Discount Rate9.19%9.19%9.19%
Growth Rate5.50%6.50%7.50%
Fair Value$157.39$238.35$404.72
Upside / Downside-21.49%18.90%101.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,180.001,256.701,338.391,425.381,518.031,616.701,665.20
Payout Ratio13.90%29.12%44.34%59.56%74.78%90.00%92.50%
Projected Dividends (M)164.00365.93593.43848.951,135.181,455.031,540.31

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.19%9.19%9.19%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)331.98335.13338.28
Year 2 PV (M)488.42497.73507.12
Year 3 PV (M)633.91652.10670.65
Year 4 PV (M)769.00798.57828.99
Year 5 PV (M)894.23937.42982.26
PV of Terminal Value (M)15,289.9916,028.5016,795.28
Equity Value (M)18,407.5319,249.4620,122.57
Shares Outstanding (M)171.43171.43171.43
Fair Value$107.38$112.29$117.38
Upside / Downside-46.44%-43.99%-41.45%

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