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HMN Financial, Inc. (HMNF)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$8.40 - $12.08$10.20
Multi-Stage$13.59 - $14.93$14.25
Blended Fair Value$12.22
Current Price$22.64
Upside-46.02%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2023202220212020201920182017201620152014
DPS0.00%0.00%0.300.240.000.000.000.000.000.000.000.00
YoY Growth--24.50%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--1.42%1.24%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)5.24
(-) Cash Dividends Paid (M)1.48
(=) Cash Retained (M)3.76
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)1.050.650.39
Cash Retained (M)3.763.763.76
(-) Cash Required (M)-1.05-0.65-0.39
(=) Excess Retained (M)2.713.103.36
(/) Shares Outstanding (M)4.414.414.41
(=) Excess Retained per Share0.610.700.76
LTM Dividend per Share0.340.340.34
(+) Excess Retained per Share0.610.700.76
(=) Adjusted Dividend0.951.041.10
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$8.40$10.20$12.08
Upside / Downside-62.91%-54.96%-46.62%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)5.245.195.135.085.034.985.13
Payout Ratio28.27%40.62%52.96%65.31%77.65%90.00%92.50%
Projected Dividends (M)1.482.112.723.323.914.484.75

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)1.911.931.95
Year 2 PV (M)2.242.282.33
Year 3 PV (M)2.482.562.63
Year 4 PV (M)2.652.762.87
Year 5 PV (M)2.762.903.05
PV of Terminal Value (M)47.8650.3652.95
Equity Value (M)59.9062.7965.79
Shares Outstanding (M)4.414.414.41
Fair Value$13.59$14.25$14.93
Upside / Downside-39.96%-37.07%-34.06%

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