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Horace Mann Educators Corporation (HMN)

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

Valuation Snapshot

Stable Growth$40.73 - $64.45$51.56
Multi-Stage$52.95 - $57.99$55.43
Blended Fair Value$53.49
Current Price$42.97
Upside24.49%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.25%3.53%1.331.301.271.241.191.141.121.111.071.02
YoY Growth--2.97%2.47%2.33%3.59%4.90%1.31%1.25%4.07%4.20%8.37%
Dividend Yield--3.12%3.55%3.78%2.96%2.76%3.11%3.14%2.59%2.60%3.23%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)164.10
(-) Cash Dividends Paid (M)56.70
(=) Cash Retained (M)107.40
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)32.8220.5112.31
Cash Retained (M)107.40107.40107.40
(-) Cash Required (M)-32.82-20.51-12.31
(=) Excess Retained (M)74.5886.8995.09
(/) Shares Outstanding (M)41.5841.5841.58
(=) Excess Retained per Share1.792.092.29
LTM Dividend per Share1.361.361.36
(+) Excess Retained per Share1.792.092.29
(=) Adjusted Dividend3.163.453.65
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.25%2.25%3.25%
Fair Value$40.73$51.56$64.45
Upside / Downside-5.21%19.99%49.99%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)164.10167.79171.56175.42179.37183.40188.91
Payout Ratio34.55%45.64%56.73%67.82%78.91%90.00%92.50%
Projected Dividends (M)56.7076.5897.33118.97141.54165.06174.74

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate1.25%2.25%3.25%
Year 1 PV (M)69.5170.2070.88
Year 2 PV (M)80.1881.7783.38
Year 3 PV (M)88.9691.6294.34
Year 4 PV (M)96.0699.91103.88
Year 5 PV (M)101.68106.80112.12
PV of Terminal Value (M)1,765.111,854.021,946.47
Equity Value (M)2,201.502,304.322,411.07
Shares Outstanding (M)41.5841.5841.58
Fair Value$52.95$55.43$57.99
Upside / Downside23.23%28.99%34.96%

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