Definitive Analysis
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Houlihan Lokey, Inc. (HLI)

Company Dividend Discount ModelIndustry: Financial - Capital MarketsSector: Financial Services

Valuation Snapshot

Stable Growth$145.31 - $385.47$222.19
Multi-Stage$101.26 - $110.54$105.82
Blended Fair Value$164.01
Current Price$205.32
Upside-20.12%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS15.42%54.26%2.402.162.041.671.341.170.970.760.801.66
YoY Growth--11.29%5.75%22.28%24.78%14.07%20.51%28.51%-5.81%-51.62%5,176.87%
Dividend Yield--1.33%1.59%2.07%2.11%1.63%2.11%2.18%1.48%2.30%7.42%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)426.54
(-) Cash Dividends Paid (M)169.80
(=) Cash Retained (M)256.74
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)85.3153.3231.99
Cash Retained (M)256.74256.74256.74
(-) Cash Required (M)-85.31-53.32-31.99
(=) Excess Retained (M)171.43203.42224.75
(/) Shares Outstanding (M)68.8668.8668.86
(=) Excess Retained per Share2.492.953.26
LTM Dividend per Share2.472.472.47
(+) Excess Retained per Share2.492.953.26
(=) Adjusted Dividend4.965.425.73
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$145.31$222.19$385.47
Upside / Downside-29.23%8.22%87.74%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)426.54454.26483.79515.23548.72584.39601.92
Payout Ratio39.81%49.85%59.88%69.92%79.96%90.00%92.50%
Projected Dividends (M)169.80226.43289.72360.27438.77525.95556.78

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)205.60207.55209.50
Year 2 PV (M)238.86243.41248.00
Year 3 PV (M)269.70277.44285.33
Year 4 PV (M)298.25309.72321.52
Year 5 PV (M)324.62340.30356.58
PV of Terminal Value (M)5,635.415,907.606,190.21
Equity Value (M)6,972.447,286.037,611.14
Shares Outstanding (M)68.8668.8668.86
Fair Value$101.26$105.82$110.54
Upside / Downside-50.68%-48.46%-46.16%

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