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Customers Bancorp, Inc 5.375% S (CUBB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$41.94 - $61.59$51.39
Multi-Stage$62.96 - $69.18$66.01
Blended Fair Value$58.70
Current Price$21.45
Upside173.67%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.93%0.00%0.460.450.280.330.430.440.440.440.280.07
YoY Growth--3.49%56.94%-13.91%-23.04%-2.65%0.00%0.00%59.75%291.14%0.00%
Dividend Yield--2.35%2.26%1.75%1.31%1.67%2.22%1.76%1.76%1.10%0.28%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)176.51
(-) Cash Dividends Paid (M)22.14
(=) Cash Retained (M)154.37
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)35.3022.0613.24
Cash Retained (M)154.37154.37154.37
(-) Cash Required (M)-35.30-22.06-13.24
(=) Excess Retained (M)119.07132.31141.14
(/) Shares Outstanding (M)32.7732.7732.77
(=) Excess Retained per Share3.634.044.31
LTM Dividend per Share0.680.680.68
(+) Excess Retained per Share3.634.044.31
(=) Adjusted Dividend4.314.714.98
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.07%-0.07%0.93%
Fair Value$41.94$51.39$61.59
Upside / Downside95.53%139.59%187.15%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)176.51176.39176.28176.16176.05175.93181.21
Payout Ratio12.54%28.03%43.52%59.02%74.51%90.00%92.50%
Projected Dividends (M)22.1449.4576.72103.96131.17158.34167.62

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-1.07%-0.07%0.93%
Year 1 PV (M)44.8745.3345.78
Year 2 PV (M)63.1864.4665.76
Year 3 PV (M)77.6880.0682.49
Year 4 PV (M)88.9492.5996.35
Year 5 PV (M)97.42102.45107.68
PV of Terminal Value (M)1,691.251,778.471,869.25
Equity Value (M)2,063.352,163.362,267.31
Shares Outstanding (M)32.7732.7732.77
Fair Value$62.96$66.01$69.18
Upside / Downside193.52%207.74%222.53%

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