Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

The Bank of N.T. Butterfield & Son Limited (NTB)

Company Dividend Discount ModelIndustry: Banks - DiversifiedSector: Financial Services

Valuation Snapshot

Stable Growth$146.41 - $502.24$240.66
Multi-Stage$94.93 - $103.72$99.25
Blended Fair Value$169.95
Current Price$42.90
Upside296.16%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-3.20%11.24%1.852.002.032.032.062.171.941.620.450.58
YoY Growth---7.66%-1.32%0.07%-1.85%-5.02%11.87%20.04%260.44%-22.14%-9.45%
Dividend Yield--4.74%6.29%7.51%5.64%5.40%12.76%5.29%3.71%1.41%2.33%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)227.77
(-) Cash Dividends Paid (M)76.08
(=) Cash Retained (M)151.69
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)45.5528.4717.08
Cash Retained (M)151.69151.69151.69
(-) Cash Required (M)-45.55-28.47-17.08
(=) Excess Retained (M)106.14123.22134.61
(/) Shares Outstanding (M)43.1043.1043.10
(=) Excess Retained per Share2.462.863.12
LTM Dividend per Share1.771.771.77
(+) Excess Retained per Share2.462.863.12
(=) Adjusted Dividend4.234.624.89
WACC / Discount Rate8.55%8.55%8.55%
Growth Rate5.50%6.50%7.50%
Fair Value$146.41$240.66$502.24
Upside / Downside241.29%460.98%1,070.73%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)227.77242.57258.34275.13293.01312.06321.42
Payout Ratio33.40%44.72%56.04%67.36%78.68%90.00%92.50%
Projected Dividends (M)76.08108.48144.77185.33230.54280.85297.32

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.55%8.55%8.55%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)99.0099.94100.88
Year 2 PV (M)120.58122.87125.19
Year 3 PV (M)140.87144.91149.03
Year 4 PV (M)159.92166.07172.40
Year 5 PV (M)177.80186.38195.30
PV of Terminal Value (M)3,393.573,557.483,727.66
Equity Value (M)4,091.734,277.654,470.46
Shares Outstanding (M)43.1043.1043.10
Fair Value$94.93$99.25$103.72
Upside / Downside121.29%131.35%141.78%

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