Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

PC Connection, Inc. (CNXN)

Company Dividend Discount ModelIndustry: Technology DistributorsSector: Technology

Valuation Snapshot

Stable Growth$21.14 - $29.94$25.48
Multi-Stage$31.42 - $34.51$32.93
Blended Fair Value$29.21
Current Price$61.99
Upside-52.88%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.49%0.00%0.410.320.351.330.330.330.350.350.410.41
YoY Growth--25.17%-6.01%-74.14%310.57%-0.30%-7.34%0.90%-14.64%0.00%0.61%
Dividend Yield--0.65%0.49%0.77%2.55%0.70%0.79%0.96%1.39%1.37%1.58%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)83.73
(-) Cash Dividends Paid (M)14.15
(=) Cash Retained (M)69.59
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)16.7510.476.28
Cash Retained (M)69.5969.5969.59
(-) Cash Required (M)-16.75-10.47-6.28
(=) Excess Retained (M)52.8459.1263.31
(/) Shares Outstanding (M)25.9325.9325.93
(=) Excess Retained per Share2.042.282.44
LTM Dividend per Share0.550.550.55
(+) Excess Retained per Share2.042.282.44
(=) Adjusted Dividend2.582.832.99
WACC / Discount Rate9.98%9.98%9.98%
Growth Rate-2.00%-1.00%0.00%
Fair Value$21.14$25.48$29.94
Upside / Downside-65.90%-58.89%-51.70%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)83.7382.8982.0681.2480.4379.6382.02
Payout Ratio16.89%31.52%46.14%60.76%75.38%90.00%92.50%
Projected Dividends (M)14.1526.1237.8649.3660.6371.6675.86

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.98%9.98%9.98%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)23.5123.7523.99
Year 2 PV (M)30.6731.3031.94
Year 3 PV (M)36.0037.1138.24
Year 4 PV (M)39.7941.4443.14
Year 5 PV (M)42.3444.5446.84
PV of Terminal Value (M)642.32675.77710.60
Equity Value (M)814.64853.92894.76
Shares Outstanding (M)25.9325.9325.93
Fair Value$31.42$32.93$34.51
Upside / Downside-49.32%-46.87%-44.33%

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