Definitive Analysis
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Graco Inc. (GGG)

Company Dividend Discount ModelIndustry: Industrial - MachinerySector: Industrials

Valuation Snapshot

Stable Growth$68.59 - $181.95$104.88
Multi-Stage$47.61 - $51.98$49.75
Blended Fair Value$77.32
Current Price$84.71
Upside-8.73%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS10.08%10.00%1.010.930.830.750.690.620.520.470.430.41
YoY Growth--8.69%11.40%11.81%8.66%9.90%19.81%10.40%9.59%5.77%4.62%
Dividend Yield--1.21%0.99%1.14%1.05%0.95%1.37%1.05%1.03%1.37%1.49%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)498.06
(-) Cash Dividends Paid (M)180.83
(=) Cash Retained (M)317.23
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)99.6162.2637.35
Cash Retained (M)317.23317.23317.23
(-) Cash Required (M)-99.61-62.26-37.35
(=) Excess Retained (M)217.62254.98279.88
(/) Shares Outstanding (M)170.34170.34170.34
(=) Excess Retained per Share1.281.501.64
LTM Dividend per Share1.061.061.06
(+) Excess Retained per Share1.281.501.64
(=) Adjusted Dividend2.342.562.70
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$68.59$104.88$181.95
Upside / Downside-19.03%23.81%114.79%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)498.06530.43564.91601.63640.74682.39702.86
Payout Ratio36.31%47.04%57.78%68.52%79.26%90.00%92.50%
Projected Dividends (M)180.83249.54326.43412.25507.86614.15650.14

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)226.58228.73230.88
Year 2 PV (M)269.13274.25279.43
Year 3 PV (M)308.62317.48326.50
Year 4 PV (M)345.21358.49372.14
Year 5 PV (M)379.06397.36416.37
PV of Terminal Value (M)6,580.396,898.227,228.22
Equity Value (M)8,108.998,474.548,853.55
Shares Outstanding (M)170.34170.34170.34
Fair Value$47.61$49.75$51.98
Upside / Downside-43.80%-41.27%-38.64%

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