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Duxton Water Limited (D2O.AX)

Company Dividend Discount ModelIndustry: Regulated WaterSector: Utilities

Valuation Snapshot

Stable Growth$2.39 - $3.71$3.00
Multi-Stage$5.58 - $6.14$5.86
Blended Fair Value$4.43
Current Price$1.52
Upside191.28%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202420232022202120202019201820172016
DPS10.92%0.00%0.060.050.050.040.040.040.020.010.000.00
YoY Growth--18.36%20.62%4.20%3.51%9.03%94.77%254.42%0.00%0.00%0.00%
Dividend Yield--4.83%3.42%2.83%2.88%3.04%2.71%1.33%0.51%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)37.35
(-) Cash Dividends Paid (M)18.93
(=) Cash Retained (M)18.42
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)7.474.672.80
Cash Retained (M)18.4218.4218.42
(-) Cash Required (M)-7.47-4.67-2.80
(=) Excess Retained (M)10.9513.7515.62
(/) Shares Outstanding (M)147.80147.80147.80
(=) Excess Retained per Share0.070.090.11
LTM Dividend per Share0.130.130.13
(+) Excess Retained per Share0.070.090.11
(=) Adjusted Dividend0.200.220.23
WACC / Discount Rate6.30%6.30%6.30%
Growth Rate-2.00%-1.00%0.00%
Fair Value$2.39$3.00$3.71
Upside / Downside56.98%97.20%143.99%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)37.3536.9736.6036.2435.8835.5236.58
Payout Ratio50.68%58.54%66.41%74.27%82.14%90.00%92.50%
Projected Dividends (M)18.9321.6524.3126.9129.4731.9733.84

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.30%6.30%6.30%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)20.1620.3620.57
Year 2 PV (M)21.0821.5121.95
Year 3 PV (M)21.7322.4123.09
Year 4 PV (M)22.1623.0824.02
Year 5 PV (M)22.3823.5524.76
PV of Terminal Value (M)717.47754.84793.74
Equity Value (M)824.98865.74908.13
Shares Outstanding (M)147.80147.80147.80
Fair Value$5.58$5.86$6.14
Upside / Downside267.22%285.36%304.22%

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