Definitive Analysis
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Constellation Energy Corporation (CEG)

Company Dividend Discount ModelIndustry: Renewable UtilitiesSector: Utilities

Valuation Snapshot

Stable Growth$88.03 - $138.32$111.10
Multi-Stage$113.57 - $124.54$118.95
Blended Fair Value$115.02
Current Price$329.07
Upside-65.05%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-13.16%-3.67%1.411.170.595.835.522.863.192.102.947.88
YoY Growth--21.31%97.84%-89.90%5.65%92.88%-10.19%51.90%-28.52%-62.73%283.57%
Dividend Yield--0.70%0.63%0.75%10.37%13.15%6.82%7.59%5.00%6.99%18.76%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)2,739.00
(-) Cash Dividends Paid (M)476.00
(=) Cash Retained (M)2,263.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)547.80342.38205.43
Cash Retained (M)2,263.002,263.002,263.00
(-) Cash Required (M)-547.80-342.38-205.43
(=) Excess Retained (M)1,715.201,920.632,057.58
(/) Shares Outstanding (M)314.00314.00314.00
(=) Excess Retained per Share5.466.126.55
LTM Dividend per Share1.521.521.52
(+) Excess Retained per Share5.466.126.55
(=) Adjusted Dividend6.987.638.07
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.08%2.08%3.08%
Fair Value$88.03$111.10$138.32
Upside / Downside-73.25%-66.24%-57.97%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)2,739.002,796.102,854.402,913.912,974.663,036.683,127.78
Payout Ratio17.38%31.90%46.43%60.95%75.48%90.00%92.50%
Projected Dividends (M)476.00892.041,325.221,776.072,245.152,733.012,893.19

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.08%2.08%3.08%
Year 1 PV (M)809.64817.65825.66
Year 2 PV (M)1,091.701,113.401,135.33
Year 3 PV (M)1,327.961,367.761,408.35
Year 4 PV (M)1,523.621,584.811,647.83
Year 5 PV (M)1,683.371,768.301,856.63
PV of Terminal Value (M)29,223.3430,697.7132,231.00
Equity Value (M)35,659.6337,349.6439,104.78
Shares Outstanding (M)314.00314.00314.00
Fair Value$113.57$118.95$124.54
Upside / Downside-65.49%-63.85%-62.15%

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