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Valley National Bancorp (VLY)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$21.91 - $58.49$33.57
Multi-Stage$15.37 - $16.77$16.06
Blended Fair Value$24.81
Current Price$10.60
Upside134.08%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS9.27%9.98%0.410.400.370.320.320.260.250.210.200.18
YoY Growth--1.25%9.42%14.66%0.96%21.45%5.53%19.83%3.64%9.32%16.07%
Dividend Yield--4.60%5.13%4.00%2.47%2.32%3.59%2.54%1.67%1.70%1.92%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)518.29
(-) Cash Dividends Paid (M)244.97
(=) Cash Retained (M)273.32
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)103.6664.7938.87
Cash Retained (M)273.32273.32273.32
(-) Cash Required (M)-103.66-64.79-38.87
(=) Excess Retained (M)169.66208.54234.45
(/) Shares Outstanding (M)557.68557.68557.68
(=) Excess Retained per Share0.300.370.42
LTM Dividend per Share0.440.440.44
(+) Excess Retained per Share0.300.370.42
(=) Adjusted Dividend0.740.810.86
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$21.91$33.57$58.49
Upside / Downside106.70%216.68%451.79%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)518.29551.98587.86626.07666.76710.10731.41
Payout Ratio47.26%55.81%64.36%72.91%81.45%90.00%92.50%
Projected Dividends (M)244.97308.07378.34456.44543.10639.09676.55

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)279.77282.42285.08
Year 2 PV (M)312.03317.97323.97
Year 3 PV (M)341.87351.68361.68
Year 4 PV (M)369.41383.62398.23
Year 5 PV (M)394.78413.85433.64
PV of Terminal Value (M)6,873.627,205.627,550.33
Equity Value (M)8,571.488,955.169,352.93
Shares Outstanding (M)557.68557.68557.68
Fair Value$15.37$16.06$16.77
Upside / Downside45.00%51.49%58.22%

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