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Horace Mann Educators Corporation (HMN)

Company Dividend Discount ModelIndustry: Insurance - Property & CasualtySector: Financial Services

Valuation Snapshot

Stable Growth$40.83 - $64.65$51.70
Multi-Stage$53.12 - $58.18$55.60
Blended Fair Value$53.65
Current Price$42.97
Upside24.85%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS3.25%3.53%1.331.301.271.241.191.141.121.111.071.02
YoY Growth--2.97%2.47%2.33%3.59%4.90%1.31%1.25%4.07%4.20%8.37%
Dividend Yield--3.12%3.55%3.78%2.96%2.76%3.11%3.14%2.59%2.60%3.23%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)164.10
(-) Cash Dividends Paid (M)56.70
(=) Cash Retained (M)107.40
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)32.8220.5112.31
Cash Retained (M)107.40107.40107.40
(-) Cash Required (M)-32.82-20.51-12.31
(=) Excess Retained (M)74.5886.8995.09
(/) Shares Outstanding (M)41.5841.5841.58
(=) Excess Retained per Share1.792.092.29
LTM Dividend per Share1.361.361.36
(+) Excess Retained per Share1.792.092.29
(=) Adjusted Dividend3.163.453.65
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate1.25%2.25%3.25%
Fair Value$40.83$51.70$64.65
Upside / Downside-4.99%20.31%50.45%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)164.10167.79171.56175.42179.37183.40188.91
Payout Ratio34.55%45.64%56.73%67.82%78.91%90.00%92.50%
Projected Dividends (M)56.7076.5897.33118.97141.54165.06174.74

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate1.25%2.25%3.25%
Year 1 PV (M)69.5270.2170.89
Year 2 PV (M)80.2181.8083.41
Year 3 PV (M)89.0091.6794.38
Year 4 PV (M)96.1299.98103.95
Year 5 PV (M)101.76106.89112.22
PV of Terminal Value (M)1,771.801,861.041,953.85
Equity Value (M)2,208.422,311.582,418.69
Shares Outstanding (M)41.5841.5841.58
Fair Value$53.12$55.60$58.18
Upside / Downside23.62%29.39%35.39%

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