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Stewart Information Services Corporation (STC)

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

Valuation Snapshot

Stable Growth$63.71 - $130.42$89.30
Multi-Stage$57.06 - $62.28$59.62
Blended Fair Value$74.46
Current Price$73.32
Upside1.55%
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 Rate9.08%9.08%9.08%
Growth Rate4.37%5.37%6.37%
Fair Value$63.71$89.30$130.42
Upside / Downside-13.11%21.79%77.88%

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 Rate9.08%9.08%9.08%
Growth Rate4.37%5.37%6.37%
Year 1 PV (M)60.1660.7461.31
Year 2 PV (M)64.1865.4266.66
Year 3 PV (M)67.7469.7171.71
Year 4 PV (M)70.8773.6376.46
Year 5 PV (M)73.6177.2080.94
PV of Terminal Value (M)1,281.621,344.211,409.22
Equity Value (M)1,618.191,690.901,766.31
Shares Outstanding (M)28.3628.3628.36
Fair Value$57.06$59.62$62.28
Upside / Downside-22.18%-18.69%-15.06%

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