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Investors Bancorp, Inc. (ISBC)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$31.24 - $83.41$47.87
Multi-Stage$21.84 - $23.84$22.82
Blended Fair Value$35.35
Current Price$15.15
Upside133.30%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2021202020192018201720162015201420132012
DPS10.99%0.00%0.590.510.520.480.430.350.370.180.090.02
YoY Growth--15.82%-2.04%7.93%11.46%23.40%-5.84%105.37%89.94%300.43%0.00%
Dividend Yield--3.87%3.45%6.47%3.96%3.15%2.42%3.18%1.54%0.87%0.32%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)313.33
(-) Cash Dividends Paid (M)138.61
(=) Cash Retained (M)174.73
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)62.6739.1723.50
Cash Retained (M)174.73174.73174.73
(-) Cash Required (M)-62.67-39.17-23.50
(=) Excess Retained (M)112.06135.56151.23
(/) Shares Outstanding (M)236.43236.43236.43
(=) Excess Retained per Share0.470.570.64
LTM Dividend per Share0.590.590.59
(+) Excess Retained per Share0.470.570.64
(=) Adjusted Dividend1.061.161.23
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$31.24$47.87$83.41
Upside / Downside106.23%215.96%450.54%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)313.33333.70355.39378.49403.09429.29442.17
Payout Ratio44.24%53.39%62.54%71.69%80.85%90.00%92.50%
Projected Dividends (M)138.61178.16222.27271.36325.89386.36409.01

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)161.80163.33164.86
Year 2 PV (M)183.31186.80190.33
Year 3 PV (M)203.24209.08215.02
Year 4 PV (M)221.67230.19238.96
Year 5 PV (M)238.66250.19262.16
PV of Terminal Value (M)4,155.454,356.164,564.55
Equity Value (M)5,164.135,395.755,635.88
Shares Outstanding (M)236.43236.43236.43
Fair Value$21.84$22.82$23.84
Upside / Downside44.17%50.64%57.35%

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