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Cathay General Bancorp (CATY)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$101.65 - $269.66$155.44
Multi-Stage$70.14 - $76.60$73.31
Blended Fair Value$114.38
Current Price$48.01
Upside138.23%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-0.24%15.54%1.391.401.441.411.401.411.190.990.840.64
YoY Growth---0.68%-2.30%1.64%0.64%-0.45%18.82%19.37%17.91%30.90%96.00%
Dividend Yield--3.24%3.80%4.16%3.16%3.44%6.14%3.41%2.49%2.24%2.27%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)304.81
(-) Cash Dividends Paid (M)95.11
(=) Cash Retained (M)209.70
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)60.9638.1022.86
Cash Retained (M)209.70209.70209.70
(-) Cash Required (M)-60.96-38.10-22.86
(=) Excess Retained (M)148.74171.60186.84
(/) Shares Outstanding (M)70.3470.3470.34
(=) Excess Retained per Share2.112.442.66
LTM Dividend per Share1.351.351.35
(+) Excess Retained per Share2.112.442.66
(=) Adjusted Dividend3.473.794.01
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$101.65$155.44$269.66
Upside / Downside111.73%223.76%461.67%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)304.81324.62345.72368.19392.13417.61430.14
Payout Ratio31.20%42.96%54.72%66.48%78.24%90.00%92.50%
Projected Dividends (M)95.11139.46189.18244.78306.80375.85397.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)126.63127.83129.03
Year 2 PV (M)155.97158.95161.94
Year 3 PV (M)183.24188.50193.86
Year 4 PV (M)208.55216.57224.81
Year 5 PV (M)231.98243.18254.82
PV of Terminal Value (M)4,027.144,221.654,423.60
Equity Value (M)4,933.515,156.685,388.08
Shares Outstanding (M)70.3470.3470.34
Fair Value$70.14$73.31$76.60
Upside / Downside46.09%52.70%59.56%

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