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Cathay General Bancorp (CATY)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$102.16 - $272.73$156.52
Multi-Stage$70.36 - $76.85$73.55
Blended Fair Value$115.03
Current Price$48.01
Upside139.61%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-0.24%15.54%1.391.401.441.411.401.411.190.990.840.64
YoY Growth---0.68%-2.30%1.64%0.64%-0.45%18.82%19.37%17.91%30.90%96.00%
Dividend Yield--3.24%3.80%4.16%3.16%3.44%6.14%3.41%2.49%2.24%2.27%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)304.81
(-) Cash Dividends Paid (M)95.11
(=) Cash Retained (M)209.70
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)60.9638.1022.86
Cash Retained (M)209.70209.70209.70
(-) Cash Required (M)-60.96-38.10-22.86
(=) Excess Retained (M)148.74171.60186.84
(/) Shares Outstanding (M)70.3470.3470.34
(=) Excess Retained per Share2.112.442.66
LTM Dividend per Share1.351.351.35
(+) Excess Retained per Share2.112.442.66
(=) Adjusted Dividend3.473.794.01
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$102.16$156.52$272.73
Upside / Downside112.80%226.02%468.07%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)304.81324.62345.72368.19392.13417.61430.14
Payout Ratio31.20%42.96%54.72%66.48%78.24%90.00%92.50%
Projected Dividends (M)95.11139.46189.18244.78306.80375.85397.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)126.65127.85129.05
Year 2 PV (M)156.03159.00162.00
Year 3 PV (M)183.33188.60193.96
Year 4 PV (M)208.68216.71224.96
Year 5 PV (M)232.17243.38255.03
PV of Terminal Value (M)4,042.394,237.644,440.36
Equity Value (M)4,949.265,173.185,405.36
Shares Outstanding (M)70.3470.3470.34
Fair Value$70.36$73.55$76.85
Upside / Downside46.56%53.19%60.07%

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