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CapStar Financial Holdings, Inc. (CSTR)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$33.18 - $88.58$50.84
Multi-Stage$22.84 - $24.94$23.87
Blended Fair Value$37.35
Current Price$18.74
Upside99.33%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS48.83%0.00%0.430.370.240.190.170.060.000.000.000.00
YoY Growth--15.72%54.90%25.58%15.06%181.91%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--2.29%2.45%1.14%1.10%1.67%0.37%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)29.80
(-) Cash Dividends Paid (M)9.08
(=) Cash Retained (M)20.72
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)5.963.732.24
Cash Retained (M)20.7220.7220.72
(-) Cash Required (M)-5.96-3.73-2.24
(=) Excess Retained (M)14.7617.0018.49
(/) Shares Outstanding (M)21.1721.1721.17
(=) Excess Retained per Share0.700.800.87
LTM Dividend per Share0.430.430.43
(+) Excess Retained per Share0.700.800.87
(=) Adjusted Dividend1.131.231.30
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$33.18$50.84$88.58
Upside / Downside77.07%171.28%372.69%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)29.8031.7433.8036.0038.3440.8342.06
Payout Ratio30.48%42.38%54.29%66.19%78.10%90.00%92.50%
Projected Dividends (M)9.0813.4518.3523.8329.9436.7538.90

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)12.2212.3312.45
Year 2 PV (M)15.1315.4215.71
Year 3 PV (M)17.8518.3618.88
Year 4 PV (M)20.3721.1521.96
Year 5 PV (M)22.7023.8024.94
PV of Terminal Value (M)395.26414.35434.18
Equity Value (M)483.53505.42528.11
Shares Outstanding (M)21.1721.1721.17
Fair Value$22.84$23.87$24.94
Upside / Downside21.85%27.37%33.09%

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