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ESSA Bancorp, Inc. (ESSA)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$31.97 - $73.92$46.76
Multi-Stage$24.83 - $27.11$25.95
Blended Fair Value$36.36
Current Price$18.85
Upside92.87%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.72%7.75%0.620.610.550.490.480.450.410.400.390.37
YoY Growth--0.79%11.11%12.33%2.96%6.87%9.05%2.14%2.22%5.67%26.64%
Dividend Yield--3.18%3.07%2.65%2.84%3.19%2.64%2.63%2.57%2.50%2.72%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)14.78
(-) Cash Dividends Paid (M)5.88
(=) Cash Retained (M)8.91
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2.961.851.11
Cash Retained (M)8.918.918.91
(-) Cash Required (M)-2.96-1.85-1.11
(=) Excess Retained (M)5.957.067.80
(/) Shares Outstanding (M)9.539.539.53
(=) Excess Retained per Share0.620.740.82
LTM Dividend per Share0.620.620.62
(+) Excess Retained per Share0.620.740.82
(=) Adjusted Dividend1.241.361.44
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.02%6.02%7.02%
Fair Value$31.97$46.76$73.92
Upside / Downside69.58%148.08%292.13%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)14.7815.6716.6217.6218.6819.8020.40
Payout Ratio39.75%49.80%59.85%69.90%79.95%90.00%92.50%
Projected Dividends (M)5.887.819.9512.3214.9317.8218.87

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.02%6.02%7.02%
Year 1 PV (M)7.097.167.22
Year 2 PV (M)8.208.368.51
Year 3 PV (M)9.229.489.75
Year 4 PV (M)10.1510.5410.94
Year 5 PV (M)11.0011.5312.09
PV of Terminal Value (M)190.92200.19209.81
Equity Value (M)236.58247.26258.33
Shares Outstanding (M)9.539.539.53
Fair Value$24.83$25.95$27.11
Upside / Downside31.71%37.66%43.83%

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