Definitive Analysis
Definitive Analysis

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Alerus Financial Corporation (ALRS)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$53.24 - $173.73$86.37
Multi-Stage$35.11 - $38.35$36.70
Blended Fair Value$61.54
Current Price$22.14
Upside177.95%
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 Rate8.63%8.63%8.63%
Growth Rate5.50%6.50%7.50%
Fair Value$53.24$86.37$173.73
Upside / Downside140.45%290.13%684.68%

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 Rate8.63%8.63%8.63%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)24.1324.3624.59
Year 2 PV (M)28.2828.8129.36
Year 3 PV (M)32.1633.0934.03
Year 4 PV (M)35.8137.1838.60
Year 5 PV (M)39.2141.1043.07
PV of Terminal Value (M)737.27772.88809.85
Equity Value (M)896.86937.43979.50
Shares Outstanding (M)25.5425.5425.54
Fair Value$35.11$36.70$38.35
Upside / Downside58.60%65.78%73.22%

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