Definitive Analysis
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Turning Point Brands, Inc. (TPB)

Company Dividend Discount ModelIndustry: TobaccoSector: Consumer Defensive

Valuation Snapshot

Stable Growth$47.04 - $91.88$64.79
Multi-Stage$42.14 - $46.13$44.10
Blended Fair Value$54.45
Current Price$98.86
Upside-44.93%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.79%0.00%0.270.240.230.220.210.190.130.040.000.00
YoY Growth--9.07%5.81%3.76%7.73%7.67%52.33%201.82%0.00%0.00%0.00%
Dividend Yield--0.45%0.84%1.10%0.66%0.40%0.91%0.27%0.21%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)52.37
(-) Cash Dividends Paid (M)5.35
(=) Cash Retained (M)47.02
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)10.476.553.93
Cash Retained (M)47.0247.0247.02
(-) Cash Required (M)-10.47-6.55-3.93
(=) Excess Retained (M)36.5540.4743.09
(/) Shares Outstanding (M)18.3818.3818.38
(=) Excess Retained per Share1.992.202.34
LTM Dividend per Share0.290.290.29
(+) Excess Retained per Share1.992.202.34
(=) Adjusted Dividend2.282.492.64
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.06%5.06%6.06%
Fair Value$47.04$64.79$91.88
Upside / Downside-52.42%-34.46%-7.06%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)52.3755.0257.8060.7263.7967.0269.03
Payout Ratio10.22%26.17%42.13%58.09%74.04%90.00%92.50%
Projected Dividends (M)5.3514.4024.3535.2747.2360.3263.85

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.06%5.06%6.06%
Year 1 PV (M)13.0713.2013.32
Year 2 PV (M)20.0720.4620.85
Year 3 PV (M)26.3927.1627.95
Year 4 PV (M)32.0933.3434.63
Year 5 PV (M)37.2039.0340.92
PV of Terminal Value (M)645.85677.49710.36
Equity Value (M)774.69810.68848.03
Shares Outstanding (M)18.3818.3818.38
Fair Value$42.14$44.10$46.13
Upside / Downside-57.37%-55.39%-53.34%

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