BlackRock, Inc. (BLK) Two-Stage Excess Return Model - Discounting Cash Flows
BLK
BlackRock, Inc.
BLK (NYSE)

Estimated Value

USD

Market Price USD

* Values are not guaranteed, please do your own
research before making investment decisions.

Two-Stage Excess Return Model

Used to estimate the value of companies based on two stages of growth. An initial period of high growth, represented by [Sum of discounted excess returns in Growth Stage], followed by a period of stable growth, represented by [Discounted excess return in terminal stage]. Excess Return models are better suited to calculate the intrinsic value of a financial company than an enterprise valuation model (such as the Discounted Free Cash Flow Model).

Read more: GitHub Documentation

Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate = Cost of Equity = Risk Free Rate + Beta * Market Premium

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

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↳ Beta

Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.

↳ Risk Free Rate

Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.

↳ Market Premium

Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.

High Growth Years

High Growth Years

The estimated number of years during which the company is expected to experience high growth. After this period, the company will transition to a stable growth phase.

Stable Return On Equity

Stable Return on Equity

The stable Return On Equity (ROE) estimated after the last projected period.

Stable Growth In Perpetuity

Stable Growth in Perpetuity

The stable rate at which the company's book value is assumed to grow in perpetuity after the last projected period.

Historical Years

Historical Years

The number of historical years used to calculate averages for historical data.

Results

Estimated Value 514.2 USD
Book value of equity invested 309.9 USD
Sum of discounted excess returns in Growth Stage 49.93 USD
Terminal stage EPS 59.48 USD
Terminal stage Book Value 416.8 USD
Terminal stage Equity Cost 43.81 USD
Discounted excess return in terminal stage 154.4 USD
Excess Returns in the Terminal Stage 254.4 USD
Terminal Cost of Equity (the discount rate) 10.51%
Terminal year's excess return 15.67 USD
Average historical Return on Equity 14.27%
Average historical Payout Ratio 46.52%
Payout Ratio in stable stage 69.52%
Yield of the U.S. 10 Year Treasury Bond 4.35%

Historical and Forecasted Data

Monetary values are in USD

Edit Chart Values 2025 2026 2027 2028 2029

amounts of USD except for #

2024 LTM 2025 2026 2027 2028 2029
Beginning Book Value 263.5 316.5 316.5 338.6 360.0 380.4 399.5
Ending Book Value 316.5 309.9 338.6 360.0 380.4 399.5 416.8
EPS 42.45 41.61 45.17 48.32 51.38 54.28 57.0
Return on Equity 16.19% 13.28% 14.27% 14.27% 14.27% 14.27% 14.27%
Dividend per Share 20.4 20.62 23.09 26.92 30.99 35.24 39.63
Payout Ratio 48.06% 49.56% 51.12% 55.72% 60.32% 64.92% 69.52%
Retained Earnings 22.05 20.99 22.08 21.4 20.39 19.04 17.38
Equity Cost 27.7 33.27 33.27 35.59 37.84 39.98 41.98
Cost of Equity 10.51% 10.51% 10.51% 10.51% 10.51% 10.51% 10.51%
Excess Return 14.75 8.34 11.9 12.73 13.54 14.3 15.02
Discounted Excess Return
10.77 10.43 10.03 9.59 9.11

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Net Income 4,949 6,306 6,369 5,502 5,178 5,901 4,932 4,476 4,305 4,952 3,172 3,345
Total Stockholders Equity 36,450 48,036 47,495 39,347 37,744 37,693 35,283 33,547 32,374 31,825 29,098 28,503
Return on Equity 14.27% 13.28% 16.19% 14.58% 13.74% 16.72% 14.7% 13.83% 13.53% 17.02% 11.13% 12.22%
Dividends Paid to Common Shareholders 2,320 3,196 3,061 2,986 2,946 2,515 2,229 2,059 1,935 1,628 1,512 1,457
Payout Ratio 46.52% 49.56% 48.06% 54.27% 56.89% 42.62% 45.19% 46.01% 44.93% 32.87% 47.73% 43.56%
Shares Outstanding 156.6 155 150 149.3 150.9 152.2 153.5 156 160.9 162.8 165.1 167.1
Earnings per Share 31.93 41.61 42.45 36.85 34.31 38.76 32.13 28.69 26.75 30.42 19.19 20.02
Dividend per Share 14.97 20.62 20.4 20 19.52 16.52 14.52 13.2 12.02 10.0 9.16 8.72
Dividend Growth Rate 9.51% 1.08% 2% 2.46% 18.16% 13.77% 10% 9.82% 20.2% 9.17% 5.05% 12.95%
Book Value 234.2 309.9 316.5 263.5 250.1 247.6 229.9 215.0 201.1 195.5 176.3 170.6
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