Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

Prudential Financial, Inc. (PRU)

Company Dividend Discount ModelIndustry: Insurance - LifeSector: Financial Services

Valuation Snapshot

Stable Growth$91.96 - $157.24$120.24
Multi-Stage$149.20 - $163.52$156.22
Blended Fair Value$138.23
Current Price$103.74
Upside33.25%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.88%6.29%5.325.205.115.114.974.624.283.653.663.14
YoY Growth--2.44%1.60%0.17%2.72%7.62%7.89%17.36%-0.31%16.38%8.76%
Dividend Yield--4.77%4.47%6.18%4.32%5.46%8.86%4.46%3.52%3.43%4.35%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,614.00
(-) Cash Dividends Paid (M)1,918.00
(=) Cash Retained (M)696.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)522.80326.75196.05
Cash Retained (M)696.00696.00696.00
(-) Cash Required (M)-522.80-326.75-196.05
(=) Excess Retained (M)173.20369.25499.95
(/) Shares Outstanding (M)355.33355.33355.33
(=) Excess Retained per Share0.491.041.41
LTM Dividend per Share5.405.405.40
(+) Excess Retained per Share0.491.041.41
(=) Adjusted Dividend5.896.446.80
WACC / Discount Rate7.15%7.15%7.15%
Growth Rate0.71%1.71%2.71%
Fair Value$91.96$120.24$157.24
Upside / Downside-11.35%15.90%51.57%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,614.002,658.642,704.042,750.212,797.182,844.952,930.29
Payout Ratio73.37%76.70%80.02%83.35%86.67%90.00%92.50%
Projected Dividends (M)1,918.002,039.162,163.892,292.292,424.452,560.452,710.52

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate7.15%7.15%7.15%
Growth Rate0.71%1.71%2.71%
Year 1 PV (M)1,884.331,903.041,921.75
Year 2 PV (M)1,847.771,884.651,921.89
Year 3 PV (M)1,808.791,863.211,918.71
Year 4 PV (M)1,767.821,839.081,912.49
Year 5 PV (M)1,725.231,812.601,903.48
PV of Terminal Value (M)43,980.1946,207.5448,524.24
Equity Value (M)53,014.1255,510.1258,102.55
Shares Outstanding (M)355.33355.33355.33
Fair Value$149.20$156.22$163.52
Upside / Downside43.82%50.59%57.62%

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