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Alerus Financial Corporation (ALRS)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$46.31 - $122.85$70.82
Multi-Stage$32.25 - $35.20$33.70
Blended Fair Value$52.26
Current Price$22.14
Upside136.03%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.63%11.22%0.600.580.500.420.410.350.290.260.240.23
YoY Growth--4.20%15.80%19.06%3.50%16.59%19.49%10.80%9.18%5.19%9.88%
Dividend Yield--3.28%2.71%3.12%1.52%1.37%2.11%1.56%1.12%1.30%1.15%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)50.43
(-) Cash Dividends Paid (M)19.71
(=) Cash Retained (M)30.72
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)10.096.303.78
Cash Retained (M)30.7230.7230.72
(-) Cash Required (M)-10.09-6.30-3.78
(=) Excess Retained (M)20.6324.4126.93
(/) Shares Outstanding (M)25.5425.5425.54
(=) Excess Retained per Share0.810.961.05
LTM Dividend per Share0.770.770.77
(+) Excess Retained per Share0.810.961.05
(=) Adjusted Dividend1.581.731.83
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$46.31$70.82$122.85
Upside / Downside109.18%219.86%454.89%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)50.4353.7057.1960.9164.8769.0971.16
Payout Ratio39.09%49.27%59.45%69.64%79.82%90.00%92.50%
Projected Dividends (M)19.7126.4634.0042.4251.7862.1865.82

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)24.0324.2524.48
Year 2 PV (M)28.0328.5729.11
Year 3 PV (M)31.7532.6633.59
Year 4 PV (M)35.2036.5537.94
Year 5 PV (M)38.3840.2342.15
PV of Terminal Value (M)666.22698.40731.81
Equity Value (M)823.60860.66899.08
Shares Outstanding (M)25.5425.5425.54
Fair Value$32.25$33.70$35.20
Upside / Downside45.65%52.20%59.00%

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