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Home Bancshares, Inc. (HOMB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$54.17 - $143.71$82.84
Multi-Stage$37.51 - $40.96$39.20
Blended Fair Value$61.02
Current Price$28.30
Upside115.62%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.87%20.54%0.760.740.650.460.440.430.400.300.240.19
YoY Growth--2.81%13.61%39.38%5.09%2.39%7.21%32.29%25.53%27.98%62.19%
Dividend Yield--2.68%3.05%2.98%2.06%1.64%3.60%2.24%1.34%0.90%0.93%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)457.78
(-) Cash Dividends Paid (M)156.43
(=) Cash Retained (M)301.35
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)91.5657.2234.33
Cash Retained (M)301.35301.35301.35
(-) Cash Required (M)-91.56-57.22-34.33
(=) Excess Retained (M)209.79244.13267.02
(/) Shares Outstanding (M)198.22198.22198.22
(=) Excess Retained per Share1.061.231.35
LTM Dividend per Share0.790.790.79
(+) Excess Retained per Share1.061.231.35
(=) Adjusted Dividend1.852.022.14
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$54.17$82.84$143.71
Upside / Downside91.43%192.71%407.81%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)457.78487.54519.23552.98588.92627.20646.01
Payout Ratio34.17%45.34%56.50%67.67%78.83%90.00%92.50%
Projected Dividends (M)156.43221.04293.38374.19464.27564.48597.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)200.70202.60204.51
Year 2 PV (M)241.88246.49251.14
Year 3 PV (M)280.12288.17296.36
Year 4 PV (M)315.58327.72340.20
Year 5 PV (M)348.40365.23382.70
PV of Terminal Value (M)6,048.216,340.346,643.65
Equity Value (M)7,434.907,770.548,118.56
Shares Outstanding (M)198.22198.22198.22
Fair Value$37.51$39.20$40.96
Upside / Downside32.54%38.52%44.73%

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