Definitive Analysis
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HCI Group, Inc. (HCI)

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

Valuation Snapshot

Stable Growth$374.19 - $992.62$572.17
Multi-Stage$251.56 - $275.10$263.12
Blended Fair Value$417.64
Current Price$191.93
Upside117.60%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS4.99%3.00%1.301.071.191.100.991.020.891.090.970.97
YoY Growth--20.99%-9.94%8.30%10.80%-2.44%14.97%-18.61%11.80%0.08%0.59%
Dividend Yield--0.87%0.93%2.22%1.61%1.29%2.53%2.09%2.85%2.13%2.92%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)203.94
(-) Cash Dividends Paid (M)18.35
(=) Cash Retained (M)185.58
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)40.7925.4915.30
Cash Retained (M)185.58185.58185.58
(-) Cash Required (M)-40.79-25.49-15.30
(=) Excess Retained (M)144.80160.09170.29
(/) Shares Outstanding (M)12.7812.7812.78
(=) Excess Retained per Share11.3312.5213.32
LTM Dividend per Share1.441.441.44
(+) Excess Retained per Share11.3312.5213.32
(=) Adjusted Dividend12.7613.9614.76
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$374.19$572.17$992.62
Upside / Downside94.96%198.11%417.18%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)203.94217.19231.31246.34262.36279.41287.79
Payout Ratio9.00%25.20%41.40%57.60%73.80%90.00%92.50%
Projected Dividends (M)18.3554.7395.76141.89193.62251.47266.21

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)49.6950.1750.64
Year 2 PV (M)78.9580.4581.97
Year 3 PV (M)106.22109.27112.38
Year 4 PV (M)131.61136.67141.88
Year 5 PV (M)155.21162.70170.49
PV of Terminal Value (M)2,694.402,824.542,959.66
Equity Value (M)3,216.083,363.803,517.01
Shares Outstanding (M)12.7812.7812.78
Fair Value$251.56$263.12$275.10
Upside / Downside31.07%37.09%43.33%

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