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Employers Holdings, Inc. (EIG)

Company Dividend Discount ModelIndustry: Insurance - SpecialtySector: Financial Services

Valuation Snapshot

Stable Growth$20.69 - $30.68$25.46
Multi-Stage$31.90 - $34.95$33.40
Blended Fair Value$29.43
Current Price$42.48
Upside-30.73%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS1.38%14.92%1.231.213.681.181.241.151.090.800.470.31
YoY Growth--2.02%-67.11%211.38%-4.92%7.77%5.99%35.53%71.30%49.35%2.12%
Dividend Yield--2.44%2.70%8.82%2.88%2.88%2.84%2.67%1.98%1.23%1.11%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)62.50
(-) Cash Dividends Paid (M)30.30
(=) Cash Retained (M)32.20
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)12.507.814.69
Cash Retained (M)32.2032.2032.20
(-) Cash Required (M)-12.50-7.81-4.69
(=) Excess Retained (M)19.7024.3927.51
(/) Shares Outstanding (M)24.5624.5624.56
(=) Excess Retained per Share0.800.991.12
LTM Dividend per Share1.231.231.23
(+) Excess Retained per Share0.800.991.12
(=) Adjusted Dividend2.042.232.35
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-0.69%0.31%1.31%
Fair Value$20.69$25.46$30.68
Upside / Downside-51.30%-40.07%-27.78%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)62.5062.6962.8863.0863.2763.4665.37
Payout Ratio48.48%56.78%65.09%73.39%81.70%90.00%92.50%
Projected Dividends (M)30.3035.6040.9346.2951.6957.1260.46

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-0.69%0.31%1.31%
Year 1 PV (M)32.3132.6432.96
Year 2 PV (M)33.7234.4035.09
Year 3 PV (M)34.6135.6736.75
Year 4 PV (M)35.0836.5137.99
Year 5 PV (M)35.1836.9938.87
PV of Terminal Value (M)612.51643.98676.73
Equity Value (M)783.41820.18858.38
Shares Outstanding (M)24.5624.5624.56
Fair Value$31.90$33.40$34.95
Upside / Downside-24.91%-21.38%-17.72%

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