Definitive Analysis
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TowneBank (TOWN)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$52.52 - $139.31$80.30
Multi-Stage$36.82 - $40.19$38.48
Blended Fair Value$59.39
Current Price$34.57
Upside71.80%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.73%16.68%0.990.940.830.730.690.650.590.450.400.29
YoY Growth--5.09%13.75%13.49%5.84%5.81%10.06%30.27%12.75%38.92%37.06%
Dividend Yield--2.90%3.42%3.11%2.44%2.27%3.60%2.33%1.61%1.24%1.51%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)169.67
(-) Cash Dividends Paid (M)76.75
(=) Cash Retained (M)92.92
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)33.9321.2112.73
Cash Retained (M)92.9292.9292.92
(-) Cash Required (M)-33.93-21.21-12.73
(=) Excess Retained (M)58.9871.7180.19
(/) Shares Outstanding (M)75.7975.7975.79
(=) Excess Retained per Share0.780.951.06
LTM Dividend per Share1.011.011.01
(+) Excess Retained per Share0.780.951.06
(=) Adjusted Dividend1.791.962.07
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$52.52$80.30$139.31
Upside / Downside51.92%132.30%302.99%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)169.67180.70192.45204.95218.28232.46239.44
Payout Ratio45.24%54.19%63.14%72.09%81.05%90.00%92.50%
Projected Dividends (M)76.7597.92121.51147.76176.91209.22221.48

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)88.9189.7590.60
Year 2 PV (M)100.18102.09104.02
Year 3 PV (M)110.62113.79117.03
Year 4 PV (M)120.25124.88129.63
Year 5 PV (M)129.13135.37141.84
PV of Terminal Value (M)2,241.702,349.982,462.39
Equity Value (M)2,790.792,915.863,045.51
Shares Outstanding (M)75.7975.7975.79
Fair Value$36.82$38.48$40.19
Upside / Downside6.52%11.30%16.24%

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