Ingersoll Rand (Ingersoll Rand) Intrinsic Value: DCF (Dividends Based) : $28.42 (As of Apr. 27, 2024)

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What is Ingersoll Rand Intrinsic Value: DCF (Dividends Based)?

As of today (2024-04-27), Ingersoll Rand's intrinsic value calculated from the Discounted Dividend model is $28.42.

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.

Ingersoll Rand'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 Ingersoll Rand is -228.99%.

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

IR's Price-to-DCF (Dividends Based) is not ranked ^*
in the Industrial Products industry.
Industry Median: 1.115
* Ranked among companies with meaningful Price-to-DCF (Dividends Based) only.

Ingersoll Rand Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for Ingersoll Rand'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.

Ingersoll Rand Intrinsic Value: DCF (Dividends Based) Chart

Ingersoll Rand Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Intrinsic Value: DCF (Dividends Based)

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Ingersoll Rand Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Intrinsic Value: DCF (Dividends Based)	Get a 7-Day Free Trial															-	-	-	-	-

Competitive Comparison of Ingersoll Rand's Intrinsic Value: DCF (Dividends Based)

For the Specialty Industrial Machinery subindustry, Ingersoll Rand'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.

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

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

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

Ingersoll Rand 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 4.66%. 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.
=> Ingersoll Rand'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 = $2.4624.
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.

Ingersoll Rand'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)]

2.4624

11.5406

28.42

Margin of Safety % (DCF Dividends Based)	=	(Intrinsic Value: DCF (Dividends Based)	-	Current Price)	/	Intrinsic Value: DCF (Dividends Based)
	=	(28.42	-	93.50)	/	28.42
	=	-228.99 %

Ingersoll Rand (NYSE:IR) 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.

Ingersoll Rand Intrinsic Value: DCF (Dividends Based) Related Terms

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Ingersoll Rand (Ingersoll Rand) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Ingersoll Rand Inc (NYSE:IR) » Definitions » Intrinsic Value: DCF (Dividends Based)

Comparable Companies

Traded in Other Exchanges

5GD:Germany 5GD:Germany

Address

525 Harbour Place Drive, Suite 600, Davidson, NC, USA, 28036

Website

https://www.irco.com

Ingersoll Rand was formed through the merger of Gardner Denver and Ingersoll Rand's industrial segment. The firm's portfolio consists of two business lines: industrial technologies and services and precision and science technologies. Ingersoll Rand serves a variety of end markets, including industrial, medical, and energy. Its broad portfolio of products includes compression, blower and vacuum, and fluid management. Ingersoll Rand generated roughly $5.9 billion in revenue in 2022.

Executives

Andrew R Schiesl	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Joanna Sohovich	director	123 MAIN STREET, BRISTOL CT 06010
Julie Schertell	director	3460 PRESTON RIDGE ROAD, SUITE 600, ALPHARETTA GA 30005
Santiago Arias Duval	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Vikram Kini	officer: Senior Vice President and CFO	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Matthew J Emmerich	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Vicente Reynal	director, officer: Chief Executive Officer	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Kathleen M. Keene	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Gary E Gillespie	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Michael J Scheske	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Jennifer Hartsock	director	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Viseras Enrique Minarro	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Nicholas J Kendall-jones	officer: See Remarks	C/O INGERSOLL RAND INC., 525 HARBOUR PLACE DRIVE, SUITE 600, DAVIDSON NC 28036
Michael Stubblefield	director	C/O AVANTOR, INC., 100 MATSONFORD ROAD, RADNOR PA 19087
Mark P Stevenson	director	850 LINCOLN CENTRE DRIVE, FOSTER CITY CA 94404