Precision Castparts (Precision Castparts) Intrinsic Value: DCF (Dividends Based) : $99.40 (As of May. 05, 2024)

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What is Precision Castparts Intrinsic Value: DCF (Dividends Based)?

As of today (2024-05-05), Precision Castparts's intrinsic value calculated from the Discounted Dividend model is $99.40.

Note: Discounted Dividend model is only suitable for companies who have a consistant distribution history. If the company's dividends does not remain steady over a long period, results may not be accurate due to the low consistency. The model is also only suitable for predictable companies (Business Predictability Rank higher than 1-Star) with dividend payments. If the company's Predictability Rank is 1-Star or Not Rated, or if the company does not pay dividend, the data will not be stored into our database.

Precision Castparts's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety % (DCF Dividends Based) using Discounted Dividend Model for Precision Castparts is -136.37%.

The historical rank and industry rank for Precision Castparts's Intrinsic Value: DCF (Dividends Based) or its related term are showing as below:

PCP's Price-to-DCF (Dividends Based) is not ranked ^*
in the Industrial Products industry.
Industry Median: 1.135
* Ranked among companies with meaningful Price-to-DCF (Dividends Based) only.

Precision Castparts Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for Precision Castparts's Intrinsic Value: DCF (Dividends Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Precision Castparts Intrinsic Value: DCF (Dividends Based) Chart

Precision Castparts Annual Data

Trend

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Intrinsic Value: DCF (Dividends Based)

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Precision Castparts Quarterly Data
	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15
Intrinsic Value: DCF (Dividends Based)	Get a 7-Day Free Trial															-	-	-	-	-

Competitive Comparison of Precision Castparts's Intrinsic Value: DCF (Dividends Based)

For the Metal Fabrication subindustry, Precision Castparts's Price-to-DCF (Dividends Based), along with its competitors' market caps and Price-to-DCF (Dividends Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Precision Castparts's Price-to-DCF (Dividends Based) Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Precision Castparts's Price-to-DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where Precision Castparts's Price-to-DCF (Dividends Based) falls into.

Precision Castparts Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. The calculation method is the same as Discounted Cash Flow model except adjusted dividend are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.50%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year Dividend Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year Dividend Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year Dividend Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Precision Castparts's average Dividend Growth Rate in the past 3 years was 0.00%, which is less than 5%. GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: adjusted dividends per share = $8.613.
GuruFocus uses adjusted dividends per share by default to ensure that the valuation reflects the total value of the company, as the actual dividend is only a portion of the total value.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

Precision Castparts's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

Intrinsic Value: DCF (Dividends Based)	=	Dividends per Share	*	{[(1+g1)/(1+d)	+	(1+g1)^2/(1+d)^2	+	...	+	(1+g1)^10/(1+d)^10]
	+	(1+g1)^10/(1+d)^10	*	[(1+g2)/(1+d)	+	(1+g2)^2/(1+d)^2	+	...	+	(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Dividends Based)

Dividends per Share

{[x

x^2

...

x^10]

x^10

y^2

...

y^10]}

Dividends per Share

(1-x^10)

(1-x)

x^10

(1-y^10)

(1-y)]

8.613

11.5406

99.40

Margin of Safety % (DCF Dividends Based)	=	(Intrinsic Value: DCF (Dividends Based)	-	Current Price)	/	Intrinsic Value: DCF (Dividends Based)
	=	(99.4	-	234.95)	/	99.4
	=	-136.37 %

Precision Castparts (NYSE:PCP) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.

Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

Precision Castparts Intrinsic Value: DCF (Dividends Based) Related Terms

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Precision Castparts (Precision Castparts) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Precision Castparts Corp (NYSE:PCP) » Definitions » Intrinsic Value: DCF (Dividends Based)

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.precast.com

Precision Castparts Corp was incorporated in the State of Oregon. The Company is a manufacturer of complex metal components and products provides high-quality investment castings, forgings and fasteners/fastener systems for critical aerospace and power applications. It also provides investment castings and forgings for general industrial, armament, medical and other applications; nickel alloys and mill forms, as well as cobalt alloys, for the aerospace, chemical processing, oil and gas, pollution control and other industries; seamless pipe for coal-fired, industrial gas turbine, and nuclear power plants, as well as oil and gas applications; fasteners for automotive and general industrial markets; specialty alloys for the investment casting industry; refiner plates, screen cylinders and other products for the pulp and paper industry; metal-injection-molded and ThixoFormedparts for automotive and other markets; grinder pumps and affiliated components for low pressure sewer systems; critical auxiliary equipment and gas monitoring systems for the power generation industry; and metalworking tools for the fastener market and other applications. It manufactures complex metal components and products in three main business segments: Investment Cast Products, Forged Products and Fastener Products. The Company's Investment Cast Products segment manufactures investment castings for aircraft engines, IGT engines, airframes, medical prostheses, armament, unmanned aerial vehicles and other industrial applications. The segment also provides alloys to PCC's investment casting operations, as well as to other investment casting companies. It manufactures forged components for the aerospace and power generation markets. Forged Products' aerospace and IGT sales are mainly derived from the same large engine customers served by the Investment Cast Products segment, with additional aerospace sales to manufacturers of landing gear and airframes. Therefore, the dynamics of the aerospace and IGT markets, as described in the Investment Cast Products section above, are virtually the same for Forged Products. It manufactures forged components for the aerospace and power generation markets. Forged Products' aerospace and IGT sales are mainly derived from the same large engine customers served by the Investment Cast Products segment, with additional aerospace sales to manufacturers of landing gear and airframes. Therefore, the dynamics of the aerospace and IGT markets, as described in the Investment Cast Products section above, are virtually the same for Forged Products. The Company's main competitors are Ladish Co., a subsidiary of Allegheny Technologies, Inc., Fortech, S.A. and Thyssen AG for aerospace turbine products, Alcoa Inc. and Firth Rixson Limited for aerospace structural products, Vallourec & Mannesmann Tubes and Sumitomo Corporation for energy products and Allegheny Technologies, Inc., Carpenter Technology Corporation, Haynes International, Inc., an

Executives

Ulrich Schmidt	director	PRECISION CASTPARTS CORP., 4650 SW MACADAM AVENUE, SUITE 400, PORTLAND OR 97239
Richard L Wambold	director	C/O PACTIV CORP, 1900 W FIELD COURT, LAKE FOREST IL 60045
Lester L Lyles	director	C/O MTC TECHNOLOGIES INC, 4032 LINDEN AVENUE, DAYTON OH 45432
Timothy A Wicks	director	C/O PRECISION CASTPARTS CORP., 4650 SW MACADAM AVENUE, SUITE 400, PORTLAND OR 97239
Andrew Masterman	officer: EVP, Pres. Wyman-Gordon	401 PLYMOUTH ROAD, SUITE 500, PLYMOUTH MEETING PA 19462-1646
Kevin M Stein	officer: Exec VP	TRANSDIGM GROUP INCORPORATED, 1301 EAST 9TH STREET, SUITE 3000, CLEVELAND OH 44114
Steven G Rothmeier	director	C/O E.W BLANCH HOLDINGS INC, 500 N. AKARD #4500, DALLAS TX 75201
Russell S Pattee	officer: VP and Corporate Controller	PRECISION CASTPARTS CORP., 4650 SW MACADAM AVENUE, SUITE 400, PORTLAND OR 97239
Chris Ayers	officer: Exec. VP, Pres. PCC Forgings	4650 S.W. MACADAM, SUITE #440, PORTLAND OR 97239
William D Larsson	officer: Sr. VP and CFO	35 SHARPS CIRCLE, RENO NV 89519
Byron O Pond	director	C/O GSI GROUP INC., 125 MIDDLESEX TURNPIKE, BEDFORD MA 01730-1409
Wayne F Robbins	officer: President; PCC Flow Technologi	4650 SW MACADAM, STE 440, PORTLAND OR 97239