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Luther Burbank Corporation (LBC)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$5.09 - $7.33$6.18
Multi-Stage$8.11 - $8.92$8.51
Blended Fair Value$7.35
Current Price$8.40
Upside-12.54%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR20222021202020192018201720162015
DPS-18.33%0.00%0.490.370.250.260.321.360.340.240.000.00
YoY Growth--33.51%49.80%-5.51%-18.36%-76.46%303.57%42.37%0.00%0.00%0.00%
Dividend Yield--5.21%2.78%2.09%2.85%3.08%11.32%2.87%2.01%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)35.96
(-) Cash Dividends Paid (M)6.14
(=) Cash Retained (M)29.82
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)7.194.492.70
Cash Retained (M)29.8229.8229.82
(-) Cash Required (M)-7.19-4.49-2.70
(=) Excess Retained (M)22.6325.3227.12
(/) Shares Outstanding (M)49.8749.8749.87
(=) Excess Retained per Share0.450.510.54
LTM Dividend per Share0.120.120.12
(+) Excess Retained per Share0.450.510.54
(=) Adjusted Dividend0.580.630.67
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Fair Value$5.09$6.18$7.33
Upside / Downside-39.37%-26.37%-12.74%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)35.9635.6035.2434.8934.5434.1935.22
Payout Ratio17.07%31.66%46.24%60.83%75.41%90.00%92.50%
Projected Dividends (M)6.1411.2716.3021.2226.0530.7732.58

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)10.2210.3310.43
Year 2 PV (M)13.4213.6913.97
Year 3 PV (M)15.8516.3416.84
Year 4 PV (M)17.6518.3919.14
Year 5 PV (M)18.9319.9120.94
PV of Terminal Value (M)328.55345.66363.47
Equity Value (M)404.62424.31444.79
Shares Outstanding (M)49.8749.8749.87
Fair Value$8.11$8.51$8.92
Upside / Downside-3.41%1.29%6.18%

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