Definitive Analysis
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Definitive Analysis

Financial Statements

Mode

Ticker

Industry

Sector

Stewart Information Services Corporation (STC)

Company Dividend Discount ModelIndustry: Insurance - Property & CasualtySector: Financial Services

Valuation Snapshot

Stable Growth$77.07 - $186.62$114.49
Multi-Stage$66.35 - $72.49$69.36
Blended Fair Value$91.93
Current Price$73.32
Upside25.38%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS13.72%36.89%1.901.781.581.291.071.001.000.990.980.64
YoY Growth--6.72%13.10%21.93%21.21%6.64%0.29%0.45%1.06%54.58%671.64%
Dividend Yield--2.66%2.78%3.90%2.13%2.05%3.75%2.27%2.26%2.22%1.75%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)102.00
(-) Cash Dividends Paid (M)55.65
(=) Cash Retained (M)46.35
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)20.4012.757.65
Cash Retained (M)46.3546.3546.35
(-) Cash Required (M)-20.40-12.75-7.65
(=) Excess Retained (M)25.9533.6038.70
(/) Shares Outstanding (M)28.3628.3628.36
(=) Excess Retained per Share0.921.181.36
LTM Dividend per Share1.961.961.96
(+) Excess Retained per Share0.921.181.36
(=) Adjusted Dividend2.883.153.33
WACC / Discount Rate8.26%8.26%8.26%
Growth Rate4.37%5.37%6.37%
Fair Value$77.07$114.49$186.62
Upside / Downside5.12%56.15%154.53%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)102.00107.47113.24119.32125.72132.47136.44
Payout Ratio54.56%61.65%68.73%75.82%82.91%90.00%92.50%
Projected Dividends (M)55.6566.2577.8490.47104.24119.22126.21

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.26%8.26%8.26%
Growth Rate4.37%5.37%6.37%
Year 1 PV (M)60.6161.2061.78
Year 2 PV (M)65.1566.4167.67
Year 3 PV (M)69.2971.3073.35
Year 4 PV (M)73.0475.8878.80
Year 5 PV (M)76.4380.1684.04
PV of Terminal Value (M)1,537.281,612.351,690.33
Equity Value (M)1,881.791,967.282,055.96
Shares Outstanding (M)28.3628.3628.36
Fair Value$66.35$69.36$72.49
Upside / Downside-9.51%-5.39%-1.13%

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