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Provident Financial Services, Inc. (PFS)

Company Dividend Discount ModelIndustry: Banks - RegionalSector: Financial Services

Valuation Snapshot

Stable Growth$37.57 - $100.28$57.55
Multi-Stage$26.77 - $29.18$27.95
Blended Fair Value$42.75
Current Price$19.28
Upside121.75%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS6.76%10.83%0.770.560.550.550.500.560.410.460.350.32
YoY Growth--39.35%0.59%0.76%8.59%-9.59%35.83%-10.63%32.20%9.89%14.31%
Dividend Yield--4.51%3.83%2.88%2.34%2.27%4.34%1.56%1.80%1.35%1.57%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)207.73
(-) Cash Dividends Paid (M)126.98
(=) Cash Retained (M)80.75
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)41.5525.9715.58
Cash Retained (M)80.7580.7580.75
(-) Cash Required (M)-41.55-25.97-15.58
(=) Excess Retained (M)39.2054.7865.17
(/) Shares Outstanding (M)130.37130.37130.37
(=) Excess Retained per Share0.300.420.50
LTM Dividend per Share0.970.970.97
(+) Excess Retained per Share0.300.420.50
(=) Adjusted Dividend1.271.391.47
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Fair Value$37.57$57.55$100.28
Upside / Downside94.84%198.51%420.14%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)207.73221.23235.61250.93267.24284.61293.14
Payout Ratio61.13%66.90%72.68%78.45%84.23%90.00%92.50%
Projected Dividends (M)126.98148.01171.24196.85225.08256.15271.16

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.08%9.08%9.08%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)134.41135.69136.96
Year 2 PV (M)141.22143.91146.63
Year 3 PV (M)147.44151.67155.99
Year 4 PV (M)153.10158.99165.04
Year 5 PV (M)158.23165.87173.80
PV of Terminal Value (M)2,754.922,887.983,026.14
Equity Value (M)3,489.333,644.123,804.56
Shares Outstanding (M)130.37130.37130.37
Fair Value$26.77$27.95$29.18
Upside / Downside38.83%44.98%51.37%

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