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Hilltop Holdings Inc. (HTH)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$17.67 - $25.45$21.47
Multi-Stage$28.66 - $31.48$30.04
Blended Fair Value$25.75
Current Price$33.42
Upside-22.94%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.36%0.00%0.690.650.670.610.510.460.420.360.090.00
YoY Growth--6.38%-3.16%10.22%19.84%9.78%10.97%15.38%298.90%0.00%0.00%
Dividend Yield--2.28%2.09%2.27%2.08%1.49%3.07%2.24%1.54%0.33%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)159.53
(-) Cash Dividends Paid (M)45.41
(=) Cash Retained (M)114.12
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)31.9119.9411.96
Cash Retained (M)114.12114.12114.12
(-) Cash Required (M)-31.91-19.94-11.96
(=) Excess Retained (M)82.2194.18102.15
(/) Shares Outstanding (M)63.8763.8763.87
(=) Excess Retained per Share1.291.471.60
LTM Dividend per Share0.710.710.71
(+) Excess Retained per Share1.291.471.60
(=) Adjusted Dividend2.002.192.31
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Fair Value$17.67$21.47$25.45
Upside / Downside-47.12%-35.77%-23.86%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)159.53157.93156.35154.79153.24151.71156.26
Payout Ratio28.46%40.77%53.08%65.39%77.69%90.00%92.50%
Projected Dividends (M)45.4164.3982.99101.21119.06136.54144.54

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)58.4359.0359.63
Year 2 PV (M)68.3569.7571.16
Year 3 PV (M)75.6477.9880.37
Year 4 PV (M)80.7584.1087.55
Year 5 PV (M)84.0488.4192.97
PV of Terminal Value (M)1,463.231,539.421,618.76
Equity Value (M)1,830.431,918.692,010.43
Shares Outstanding (M)63.8763.8763.87
Fair Value$28.66$30.04$31.48
Upside / Downside-14.24%-10.11%-5.81%

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