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Home Bancshares, Inc. (HOMB)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$54.45 - $145.35$83.42
Multi-Stage$37.63 - $41.09$39.33
Blended Fair Value$61.37
Current Price$28.30
Upside116.86%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS11.87%20.54%0.760.740.650.460.440.430.400.300.240.19
YoY Growth--2.81%13.61%39.38%5.09%2.39%7.21%32.29%25.53%27.98%62.19%
Dividend Yield--2.68%3.05%2.98%2.06%1.64%3.60%2.24%1.34%0.90%0.93%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)457.78
(-) Cash Dividends Paid (M)156.43
(=) Cash Retained (M)301.35
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)91.5657.2234.33
Cash Retained (M)301.35301.35301.35
(-) Cash Required (M)-91.56-57.22-34.33
(=) Excess Retained (M)209.79244.13267.02
(/) Shares Outstanding (M)198.22198.22198.22
(=) Excess Retained per Share1.061.231.35
LTM Dividend per Share0.790.790.79
(+) Excess Retained per Share1.061.231.35
(=) Adjusted Dividend1.852.022.14
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$54.45$83.42$145.35
Upside / Downside92.39%194.76%413.59%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)457.78487.54519.23552.98588.92627.20646.01
Payout Ratio34.17%45.34%56.50%67.67%78.83%90.00%92.50%
Projected Dividends (M)156.43221.04293.38374.19464.27564.48597.56

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)200.73202.64204.54
Year 2 PV (M)241.96246.57251.22
Year 3 PV (M)280.26288.31296.51
Year 4 PV (M)315.79327.94340.43
Year 5 PV (M)348.69365.53383.02
PV of Terminal Value (M)6,071.126,364.366,668.82
Equity Value (M)7,458.567,795.348,144.53
Shares Outstanding (M)198.22198.22198.22
Fair Value$37.63$39.33$41.09
Upside / Downside32.96%38.96%45.19%

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