Definitive Analysis
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Hagerty, Inc. (HGTY)

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

Valuation Snapshot

Stable Growth$3.40 - $4.89$4.13
Multi-Stage$5.38 - $5.92$5.65
Blended Fair Value$4.89
Current Price$12.04
Upside-59.41%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018
DPS0.00%0.00%0.060.000.000.050.040.000.000.000.000.00
YoY Growth--0.00%0.00%-100.00%1.40%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--0.69%0.00%0.00%0.42%0.46%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)43.30
(-) Cash Dividends Paid (M)5.60
(=) Cash Retained (M)37.70
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)8.665.413.25
Cash Retained (M)37.7037.7037.70
(-) Cash Required (M)-8.66-5.41-3.25
(=) Excess Retained (M)29.0432.2834.45
(/) Shares Outstanding (M)89.9889.9889.98
(=) Excess Retained per Share0.320.360.38
LTM Dividend per Share0.060.060.06
(+) Excess Retained per Share0.320.360.38
(=) Adjusted Dividend0.380.420.45
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$3.40$4.13$4.89
Upside / Downside-71.77%-65.72%-59.37%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)43.3042.8642.4442.0141.5941.1842.41
Payout Ratio12.93%28.35%43.76%59.17%74.59%90.00%92.50%
Projected Dividends (M)5.6012.1518.5724.8631.0237.0639.23

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)11.0211.1411.25
Year 2 PV (M)15.2915.6015.92
Year 3 PV (M)18.5719.1419.73
Year 4 PV (M)21.0321.9022.80
Year 5 PV (M)22.7923.9825.21
PV of Terminal Value (M)395.64416.24437.69
Equity Value (M)484.34508.00532.60
Shares Outstanding (M)89.9889.9889.98
Fair Value$5.38$5.65$5.92
Upside / Downside-55.29%-53.11%-50.84%

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