Wells Fargo & Company (WFC) Two-Stage Dividend Discount Model - Discounting Cash Flows
WFC
Wells Fargo & Company
WFC (NYSE)

Estimated Value

USD

Market Price USD

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

Two-Stage Dividend Discount Model

Used to estimate the value of companies based on two stages of growth. An initial period of high growth, calculated using [Sum of Discounted Dividends], followed by a period of stable growth, calculated using [Discounted Terminal Value].

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.

Historical Years

Historical Years

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

High Growth Rate

High Growth Rate

The estimated growth rate of Earnings Per Share (EPS) during the high-growth phase.

High Growth Payout

High Growth Payout

The estimated dividend payout rate expressed as a percentage of Earnings Per Share (EPS) during the high-growth phase.

Stable Growth In Perpetuity

Stable Growth in Perpetuity

The estimated stable rate at which the company's Earnings Per Share (EPS) will grow in perpetuity after the last projected period.

Stable Payout

Stable Payout

The estimated dividend payout rate expressed as a percentage of Earnings Per Share (EPS) after the last projected period.

Results

Sum of discounted dividends 10.5 USD
Discounted terminal value 41.36 USD
Terminal value 64.88 USD
Dividend in stable phase 3.24 USD
EPS in stable phase 5.85 USD
Average historical Dividend Growth Rate 6.68%
Average historical Payout Ratio 55.89%
Average historical Return on Equity 9.93%

Historical and Projected Dividends

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
Earnings Per Share 5.43 5.64 4.32 4.61 4.92 5.25 5.6
Dividend per Share 1.5 1.6 2.42 2.58 2.75 2.93 3.13
Dividend Growth Rate 15.38% 6.67% 61.09% 6.68% 6.68% 6.68% 6.68%
Discounted Dividend 1.5 1.6 2.21 2.15 2.1 2.05 2.0

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Net Income 18,832 19,997 19,722 19,142 13,677 22,109 3,377 19,715 22,393 22,183 21,938 22,894
Equity 189,208 181,090 179,120 185,735 180,227 187,606 184,680 187,146 196,166 206,936 199,581 192,998
Return on Equity 9.93% 11.16% 10.62% 10.62% 7.29% 11.97% 1.8% 10.05% 10.82% 11.11% 11.37% 12.42%
Common Dividends 6,039 5,249 5,509 4,795 4,186 2,437 5,024 8,435 7,872 7,645 7,680 7,602
Payout Ratio 55.89% 28.37% 27.62% 26.64% 34.7% 12.02% 290.5% 46.6% 38.05% 37.2% 37.72% 35.41%
Shares Outstanding 4,270 3,280 3,673 3,688 3,805 4,062 4,118 4,393 4,800 4,965 5,053 5,136
Reference Market Price 53.68 81.59 70.24 49.22 41.29 47.98 30.18 53.8 46.08 60.67 55.11 54.36
EPS 4.12 5.64 5.43 4.88 3.17 4.99 0.42 4.12 4.31 4.14 4.03 4.18
Dividend per Share 1.4 1.6 1.5 1.3 1.1 0.6 1.22 1.92 1.64 1.54 1.52 1.48
Dividend Growth Rate 6.68% 6.67% 15.38% 18.18% 83.33% -50.82% -36.46% 17.07% 6.49% 1.32% 2.7% 9.63%
Dividend Yield 2.71% 1.96% 2.14% 2.64% 2.66% 1.25% 4.04% 3.57% 3.56% 2.54% 2.76% 2.72%
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Discounting Cash Flows

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