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The Travelers Companies, Inc. (TRV)

Company Dividend Discount ModelIndustry: Insurance - Property & CasualtySector: Financial Services

Valuation Snapshot

Stable Growth$380.01 - $698.26$511.33
Multi-Stage$373.35 - $408.70$390.70
Blended Fair Value$451.01
Current Price$279.22
Upside61.53%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS2.42%2.69%4.143.963.813.793.753.683.553.423.303.22
YoY Growth--4.74%3.77%0.69%0.93%2.01%3.69%3.69%3.70%2.44%1.37%
Dividend Yield--1.57%1.73%2.22%2.07%2.49%3.70%2.57%2.46%2.74%2.76%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)5,874.00
(-) Cash Dividends Paid (M)977.00
(=) Cash Retained (M)4,897.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1,174.80734.25440.55
Cash Retained (M)4,897.004,897.004,897.00
(-) Cash Required (M)-1,174.80-734.25-440.55
(=) Excess Retained (M)3,722.204,162.754,456.45
(/) Shares Outstanding (M)229.48229.48229.48
(=) Excess Retained per Share16.2218.1419.42
LTM Dividend per Share4.264.264.26
(+) Excess Retained per Share16.2218.1419.42
(=) Adjusted Dividend20.4822.4023.68
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate3.50%4.50%5.50%
Fair Value$380.01$511.33$698.26
Upside / Downside36.10%83.13%150.08%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)5,874.006,138.486,414.866,703.697,005.527,320.947,540.57
Payout Ratio16.63%31.31%45.98%60.65%75.33%90.00%92.50%
Projected Dividends (M)977.001,921.722,949.524,065.995,277.016,588.856,975.02

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate3.50%4.50%5.50%
Year 1 PV (M)1,744.891,761.751,778.61
Year 2 PV (M)2,431.702,478.922,526.58
Year 3 PV (M)3,043.713,132.793,223.58
Year 4 PV (M)3,586.783,727.413,872.15
Year 5 PV (M)4,066.354,266.624,474.70
PV of Terminal Value (M)70,800.6674,287.6377,910.66
Equity Value (M)85,674.0989,655.1293,786.29
Shares Outstanding (M)229.48229.48229.48
Fair Value$373.35$390.70$408.70
Upside / Downside33.71%39.92%46.37%

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