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Old National Bancorp (ONB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$42.77 - $114.17$65.52
Multi-Stage$29.60 - $32.32$30.94
Blended Fair Value$48.23
Current Price$21.95
Upside119.72%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS16.40%14.78%0.570.540.530.280.280.270.250.220.200.17
YoY Growth--6.18%1.36%91.34%-0.13%3.88%8.90%13.16%7.50%21.57%15.30%
Dividend Yield--2.70%3.23%3.68%1.70%1.44%2.03%1.46%1.28%1.16%1.36%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)606.51
(-) Cash Dividends Paid (M)215.16
(=) Cash Retained (M)391.34
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)121.3075.8145.49
Cash Retained (M)391.34391.34391.34
(-) Cash Required (M)-121.30-75.81-45.49
(=) Excess Retained (M)270.04315.53345.85
(/) Shares Outstanding (M)334.34334.34334.34
(=) Excess Retained per Share0.810.941.03
LTM Dividend per Share0.640.640.64
(+) Excess Retained per Share0.810.941.03
(=) Adjusted Dividend1.451.591.68
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$42.77$65.52$114.17
Upside / Downside94.84%198.51%420.13%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)606.51645.93687.92732.63780.25830.97855.90
Payout Ratio35.48%46.38%57.29%68.19%79.10%90.00%92.50%
Projected Dividends (M)215.16299.59394.08499.58617.14747.87791.70

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)272.07274.65277.23
Year 2 PV (M)325.01331.20337.45
Year 3 PV (M)374.18384.92395.87
Year 4 PV (M)419.77435.92452.52
Year 5 PV (M)461.97484.28507.45
PV of Terminal Value (M)8,043.558,432.068,835.43
Equity Value (M)9,896.5610,343.0310,805.95
Shares Outstanding (M)334.34334.34334.34
Fair Value$29.60$30.94$32.32
Upside / Downside34.85%40.94%47.25%

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