Definitive Analysis
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Diamond Hill Investment Group, Inc. (DHIL)

Company Dividend Discount ModelIndustry: Asset ManagementSector: Financial Services

Valuation Snapshot

Stable Growth$151.26 - $228.89$187.81
Multi-Stage$222.50 - $243.60$232.85
Blended Fair Value$210.33
Current Price$140.01
Upside50.23%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-11.40%2.24%6.046.4611.2226.6713.8811.0710.278.877.486.22
YoY Growth---6.48%-42.42%-57.93%92.12%25.44%7.76%15.72%18.63%20.16%28.55%
Dividend Yield--4.23%4.29%6.82%14.24%8.90%12.26%7.21%4.30%3.84%3.51%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)46.87
(-) Cash Dividends Paid (M)24.59
(=) Cash Retained (M)22.29
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)9.375.863.52
Cash Retained (M)22.2922.2922.29
(-) Cash Required (M)-9.37-5.86-3.52
(=) Excess Retained (M)12.9116.4318.77
(/) Shares Outstanding (M)2.742.742.74
(=) Excess Retained per Share4.726.006.86
LTM Dividend per Share8.998.998.99
(+) Excess Retained per Share4.726.006.86
(=) Adjusted Dividend13.7114.9915.85
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.03%1.03%2.03%
Fair Value$151.26$187.81$228.89
Upside / Downside8.03%34.14%63.48%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)46.8747.3647.8548.3448.8449.3550.83
Payout Ratio52.46%59.97%67.47%74.98%82.49%90.00%92.50%
Projected Dividends (M)24.5928.4032.2936.2540.2944.4147.02

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate0.03%1.03%2.03%
Year 1 PV (M)25.7726.0326.29
Year 2 PV (M)26.5927.1327.67
Year 3 PV (M)27.1027.9228.75
Year 4 PV (M)27.3328.4429.58
Year 5 PV (M)27.3428.7430.19
PV of Terminal Value (M)474.66498.86524.05
Equity Value (M)608.79637.12666.52
Shares Outstanding (M)2.742.742.74
Fair Value$222.50$232.85$243.60
Upside / Downside58.92%66.31%73.99%

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