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DCP Midstream, LP (DCP)

Company Dividend Discount ModelIndustry: Oil & Gas MidstreamSector: Energy

Valuation Snapshot

Stable Growth$71.09 - $139.26$98.03
Multi-Stage$65.49 - $71.58$68.48
Blended Fair Value$83.25
Current Price$41.69
Upside99.70%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2022202120202019201820172016201520142013
DPS0.00%0.00%1.921.842.233.250.000.000.000.000.000.00
YoY Growth--4.43%-17.42%-31.31%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--4.61%5.49%10.29%79.76%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)894.00
(-) Cash Dividends Paid (M)304.00
(=) Cash Retained (M)590.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)178.80111.7567.05
Cash Retained (M)590.00590.00590.00
(-) Cash Required (M)-178.80-111.75-67.05
(=) Excess Retained (M)411.20478.25522.95
(/) Shares Outstanding (M)208.55208.55208.55
(=) Excess Retained per Share1.972.292.51
LTM Dividend per Share1.461.461.46
(+) Excess Retained per Share1.972.292.51
(=) Adjusted Dividend3.433.753.97
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.06%5.06%6.06%
Fair Value$71.09$98.03$139.26
Upside / Downside70.52%135.13%234.03%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)894.00939.24986.761,036.691,089.151,144.261,178.59
Payout Ratio34.00%45.20%56.40%67.60%78.80%90.00%92.50%
Projected Dividends (M)304.00424.57556.56700.82858.261,029.831,090.19

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate4.06%5.06%6.06%
Year 1 PV (M)385.52389.23392.93
Year 2 PV (M)458.90467.76476.71
Year 3 PV (M)524.70539.97555.54
Year 4 PV (M)583.48606.23629.64
Year 5 PV (M)635.73666.87699.22
PV of Terminal Value (M)11,068.9511,611.1212,174.34
Equity Value (M)13,657.2814,281.1814,928.38
Shares Outstanding (M)208.55208.55208.55
Fair Value$65.49$68.48$71.58
Upside / Downside57.08%64.26%71.70%

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