Central Pacific Financial Corp Valuation – August 2018 $CPF

Company Profile (excerpt from Reuters): Central Pacific Financial Corp., incorporated on February 1, 1982, is a bank holding company. The Company’s principal business is to serve as a holding company for its bank subsidiary, Central Pacific Bank (the Bank). The Company’s segments include Banking Operations, Treasury and All Others. The Banking Operations segment includes construction and real estate development lending, commercial lending, residential mortgage lending, consumer lending, trust services, retail brokerage services and its retail branch offices, which provide a range of deposit and loan products, as well as various other banking services. The Treasury segment is responsible for managing the Company’s investment securities portfolio and wholesale funding activities. The All Others segment includes activities, such as electronic banking, data processing and management of Bank-owned properties. As of December 31, 2016, the Company, through the Bank and its subsidiaries, offered full-service commercial banking with 35 bank branches and 103 automated teller machines (ATMs) located throughout the state of Hawaii. The Company also offers wealth management products and services, such as non-deposit investment products, annuities, insurance, investment management, asset custody, and general consultation and planning services.

Downloadable PDF version of this valuation:

ModernGraham Valuation of CPF – August 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $817,252,932 Fail
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Fail
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -101.43% Fail
5. Moderate PEmg Ratio PEmg < 20 18.10 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.72 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.54
MG Growth Estimate 15.00%
MG Value $59.11
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $22.26
MG Value based on 0% Growth $13.05
Market Implied Growth Rate 4.80%
Current Price $27.79
% of Intrinsic Value 47.01%

Central Pacific Financial Corp. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $-9.3 in 2014 to an estimated $1.54 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 4.8% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Central Pacific Financial Corp. revealed the company was trading above its Graham Number of $26.4. The company pays a dividend of $0.7 per share, for a yield of 2.5%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 18.1, which was below the industry average of 19.62, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Central Pacific Financial Corp. performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Graham Number $26.40
PEmg 18.10
PB Ratio 1.72
Dividend Yield 2.52%
TTM Dividend $0.70
Number of Consecutive Years of Dividend Growth 5

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Long-Term Debt & Capital Lease Obligation $179,785,000
Total Assets $5,681,519,000
Intangible Assets $15,756,000
Total Liabilities $5,200,851,000
Shares Outstanding (Diluted Average) 29,715,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.86
Dec2017 $1.34
Dec2016 $1.50
Dec2015 $1.40
Dec2014 $1.07
Dec2013 $4.07
Dec2012 $1.13
Dec2011 $3.31
Dec2010 -$171.13
Dec2009 -$159.89
Dec2008 -$70.03
Dec2007 $2.76
Dec2006 $37.26
Dec2005 $34.51
Dec2004 $27.11
Dec2003 $30.01
Dec2002 $29.58
Dec2001 $24.94
Dec2000 $15.51
Dec1999 $12.18
Dec1998 $10.51

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.54
Dec2017 $1.54
Dec2016 $1.71
Dec2015 $1.94
Dec2014 -$9.30
Dec2013 -$31.16
Dec2012 -$58.95
Dec2011 -$85.66
Dec2010 -$110.84
Dec2009 -$64.15
Dec2008 -$8.75
Dec2007 $23.37
Dec2006 $33.02
Dec2005 $30.34
Dec2004 $27.32
Dec2003 $25.76
Dec2002 $21.94

Recommended Reading:

Other ModernGraham posts about the company

14 Best Stocks for Value Investors This Week – 2/11/17
Central Pacific Financial Corp Valuation – Initial Coverage $CPF

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Cullen/Frost Bankers Inc Valuation – July 2018 $CFR
Signature Bank Valuation – July 2018 $SBNY
City Holding Co Valuation – July 2018 $CHCO
Southside Bancshares Inc Valuation – July 2018 $SBSI
Independent Bank Corp Valuation – July 2018 $INDB
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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Central Pacific Financial Corp Valuation – Initial Coverage $CPF

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Central Pacific Financial Corp (CPF) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Central Pacific Financial Corp. serves as the bank holding company for its bank subsidiary, Central Pacific Bank (the bank). The Company’s segments include Banking Operations, Treasury and All Others. The Banking Operations segment includes construction and commercial real estate lending, commercial lending, residential mortgage lending, consumer lending, trust services, retail brokerage services, and the Company’s retail branch offices, which provide a range of deposit and loan products, as well as various other banking services. The Treasury segment is responsible for managing the Company’s investment securities portfolio and wholesale funding activities. The All Others segment includes activities, such as electronic banking, data processing and management of bank owned properties. The Company provides an array of loan products, including residential mortgage loans commercial and consumer loans and lines of credit commercial real estate loans and construction loans.

CPF Chart

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of CPF – February 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $997,716,010 Fail
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Fail
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -101.09% Fail
5. Moderate PEmg Ratio PEmg < 20 19.94 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.94 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

EPSmg $1.58
MG Growth Estimate 15.00%
MG Value $60.98
Opinion Undervalued
MG Grade C
MG Value based on 3% Growth $22.97
MG Value based on 0% Growth $13.46
Market Implied Growth Rate 5.72%
Current Price $31.59
% of Intrinsic Value 51.80%

Central Pacific Financial Corp. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, insufficient earnings stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $-31.16 in 2013 to an estimated $1.58 for 2017. This level of demonstrated earnings growth outpaces the market’s implied estimate of 5.72% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Central Pacific Financial Corp. revealed the company was trading above its Graham Number of $23.27. The company pays a dividend of $0.6 per share, for a yield of 1.9% Its PEmg (price over earnings per share – ModernGraham) was 19.94, which was below the industry average of 21.43, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Central Pacific Financial Corp. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Graham Number $23.27
PEmg 19.94
PB Ratio 1.94
Dividend Yield 1.90%
TTM Dividend $0.60
Number of Consecutive Years of Dividend Growth 5

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Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Long-Term Debt & Capital Lease Obligation $92,785,000
Total Assets $5,384,236,000
Intangible Assets $20,459,000
Total Liabilities $4,879,586,000
Shares Outstanding (Diluted Average) 31,001,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.47
Dec2016 $1.50
Dec2015 $1.40
Dec2014 $1.07
Dec2013 $4.07
Dec2012 $1.13
Dec2011 $3.31
Dec2010 -$171.13
Dec2009 -$159.89
Dec2008 -$70.03
Dec2007 $2.76
Dec2006 $37.26
Dec2005 $34.51
Dec2004 $27.11
Dec2003 $30.01
Dec2002 $29.58
Dec2001 $24.94
Dec2000 $15.51
Dec1999 $12.18
Dec1998 $10.51
Dec1997 $10.15

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.58
Dec2016 $1.71
Dec2015 $1.94
Dec2014 -$9.30
Dec2013 -$31.16
Dec2012 -$58.95
Dec2011 -$85.66
Dec2010 -$110.84
Dec2009 -$64.15
Dec2008 -$8.75
Dec2007 $23.37
Dec2006 $33.02
Dec2005 $30.34
Dec2004 $27.32
Dec2003 $25.76
Dec2002 $21.94
Dec2001 $16.96

Recommended Reading:

Other ModernGraham posts about the company

None. This is the first time ModernGraham has covered the company.

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Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Regions Financial Corp Valuation – January 2019 $RF

Company Profile (excerpt from Reuters): Regions Financial Corporation, incorporated on February 13, 2004, is a financial holding company. The Company conducts its banking operations through Regions Bank, an Alabama state-chartered commercial bank, which is a member of the Federal Reserve System. The Company operates in three segments: Corporate Bank, Consumer Bank and Wealth Management. The Company provides traditional commercial, retail and mortgage banking services, as well as other financial services in the fields of asset management, wealth management, securities brokerage, insurance brokerage, trust services, merger and acquisition advisory services, and other specialty financing. As of December 31, 2016, the Company operated 1,906 automatic teller machines (ATMs) and over 1,527 banking offices in Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, and Texas.

Downloadable PDF version of this valuation:

ModernGraham Valuation of RF – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $15,962,952,366 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -252.47% Fail
5. Moderate PEmg Ratio PEmg < 20 13.99 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.14 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.10
MG Growth Estimate 15.00%
MG Value $42.48
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $16.00
MG Value based on 0% Growth $9.38
Market Implied Growth Rate 2.75%
Current Price $15.44
% of Intrinsic Value 36.35%

Regions Financial Corp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.52 in 2014 to an estimated $1.1 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.75% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Regions Financial Corp revealed the company was trading below its Graham Number of $21.6. The company pays a dividend of $0.32 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 13.99, which was below the industry average of 14.65, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Regions Financial Corp fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $21.60
PEmg 13.99
PB Ratio 1.14
Dividend Yield 2.04%
TTM Dividend $0.32
Number of Consecutive Years of Dividend Growth 5

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $11,178,000,000
Total Assets $124,578,000,000
Intangible Assets $5,357,000,000
Total Liabilities $109,808,000,000
Shares Outstanding (Diluted Average) 1,095,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.53
Dec2017 $1.00
Dec2016 $0.87
Dec2015 $0.75
Dec2014 $0.79
Dec2013 $0.75
Dec2012 $0.71
Dec2011 -$0.34
Dec2010 -$0.62
Dec2009 -$1.27
Dec2008 -$8.09
Dec2007 $1.76
Dec2006 $2.67
Dec2005 $2.15
Dec2004 $2.19
Dec2003 $2.90
Dec2002 $2.72
Dec2001 $1.82
Dec2000 $1.92
Dec1999 $1.90
Dec1998 $1.88

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.10
Dec2017 $0.87
Dec2016 $0.80
Dec2015 $0.68
Dec2014 $0.52
Dec2013 $0.20
Dec2012 -$0.69
Dec2011 -$1.49
Dec2010 -$1.75
Dec2009 -$1.73
Dec2008 -$1.26
Dec2007 $2.21
Dec2006 $2.47
Dec2005 $2.36
Dec2004 $2.42
Dec2003 $2.44
Dec2002 $2.15

Recommended Reading:

Other ModernGraham posts about the company

10 Undervalued Stocks for the Enterprising Investor – April 2018
Regions Financial Corp Valuation – March 2018 $RF
Best Stocks Below Their Graham Number – August 2016
Best Stocks to Invest In: the Bank Industry – August 2016
Stocks Trading Below Their Graham Number – July 2016

Other ModernGraham posts about related companies

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KeyCorp Valuation – January 2019 $KEY
Citigroup Inc Valuation – January 2019 $C
People’s United Financial Inc Valuation – January 2019 $PBCT
JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Huntington Bancshares Inc Valuation – January 2019 $HBAN

Company Profile (excerpt from Reuters): Huntington Bancshares Incorporated (Huntington), incorporated on April 14, 1966, is a bank holding company. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), the Company provides commercial and consumer banking services, mortgage banking services, automobile financing, recreational vehicle and marine financing, equipment leasing, investment management, trust services, brokerage services, insurance programs, and other financial products and services. Its segments include Consumer and Business Banking, Commercial Banking, Commercial Real Estate and Vehicle Finance, Regional Banking and The Huntington Private Client Group, Home Lending and Treasury/Other.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of HBAN – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $14,059,951,483 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -153.73% Fail
5. Moderate PEmg Ratio PEmg < 20 13.86 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.34 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.96
MG Growth Estimate 6.68%
MG Value $20.90
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $13.86
MG Value based on 0% Growth $8.13
Market Implied Growth Rate 2.68%
Current Price $13.25
% of Intrinsic Value 63.38%

Huntington Bancshares Incorporated is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.66 in 2014 to an estimated $0.96 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.68% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into Huntington Bancshares Incorporated revealed the company was trading below its Graham Number of $15.53. The company pays a dividend of $0.35 per share, for a yield of 2.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 13.86, which was below the industry average of 14.65, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Huntington Bancshares Incorporated fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $15.53
PEmg 13.86
PB Ratio 1.34
Dividend Yield 2.64%
TTM Dividend $0.35
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $9,385,000,000
Total Assets $105,652,000,000
Intangible Assets $2,550,000,000
Total Liabilities $94,718,000,000
Shares Outstanding (Diluted Average) 1,103,740,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.18
Dec2017 $1.00
Dec2016 $0.70
Dec2015 $0.81
Dec2014 $0.72
Dec2013 $0.72
Dec2012 $0.69
Dec2011 $0.59
Dec2010 $0.19
Dec2009 -$6.14
Dec2008 -$0.44
Dec2007 $0.25
Dec2006 $1.92
Dec2005 $1.77
Dec2004 $1.71
Dec2003 $1.61
Dec2002 $1.33
Dec2001 $0.54
Dec2000 $1.29
Dec1999 $1.62
Dec1998 $1.17

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.96
Dec2017 $0.83
Dec2016 $0.74
Dec2015 $0.74
Dec2014 $0.66
Dec2013 $0.16
Dec2012 -$0.42
Dec2011 -$1.02
Dec2010 -$1.50
Dec2009 -$1.74
Dec2008 $0.65
Dec2007 $1.28
Dec2006 $1.76
Dec2005 $1.58
Dec2004 $1.42
Dec2003 $1.28
Dec2002 $1.14

Recommended Reading:

Other ModernGraham posts about the company

19 Best Stocks For Value Investors This Week – 1/9/16
Huntington Bancshares Valuation – January 2016 Update $HBAN
The Best Companies of the Banking Industry – October 2015
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Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN

Other ModernGraham posts about related companies

PNC Financial Services Group Inc Valuation – January 2019 $PNC
KeyCorp Valuation – January 2019 $KEY
Citigroup Inc Valuation – January 2019 $C
People’s United Financial Inc Valuation – January 2019 $PBCT
JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

PNC Financial Services Group Inc Valuation – January 2019 $PNC

Company Profile (excerpt from Reuters): The PNC Financial Services Group, Inc., incorporated on January 19, 1983, is a diversified financial services company. The Company has businesses engaged in retail banking, including residential mortgage, corporate and institutional banking and asset management, providing many of its products and services nationally. Its primary geographic markets located in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, Florida, North Carolina, Kentucky, Washington, District of Columbia, Delaware, Virginia, Alabama, Georgia, Missouri, Wisconsin and South Carolina. It also provides various products and services internationally. The Company operates through four segments: Retail Banking, Corporate & Institutional Banking, Asset Management Group, and BlackRock. Its bank subsidiary is PNC Bank, National Association (PNC Bank), which is a national bank.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of PNC – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $55,624,785,158 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 89.35% Pass
5. Moderate PEmg Ratio PEmg < 20 12.98 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.20 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $9.29
MG Growth Estimate 6.31%
MG Value $196.11
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $134.68
MG Value based on 0% Growth $78.95
Market Implied Growth Rate 2.24%
Current Price $120.55
% of Intrinsic Value 61.47%

PNC Financial Services Group Inc qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $6.54 in 2014 to an estimated $9.29 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.24% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into PNC Financial Services Group Inc revealed the company was trading below its Graham Number of $156.09. The company pays a dividend of $2.6 per share, for a yield of 2.2%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 12.98, which was below the industry average of 14.65, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

PNC Financial Services Group Inc fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $156.09
PEmg 12.98
PB Ratio 1.20
Dividend Yield 2.16%
TTM Dividend $2.60
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $52,476,000,000
Total Assets $380,080,000,000
Intangible Assets $11,354,000,000
Total Liabilities $332,978,000,000
Shares Outstanding (Diluted Average) 467,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $10.78
Dec2017 $10.36
Dec2016 $7.30
Dec2015 $7.39
Dec2014 $7.30
Dec2013 $7.36
Dec2012 $5.28
Dec2011 $5.64
Dec2010 $5.02
Dec2009 $4.36
Dec2008 $2.44
Dec2007 $4.35
Dec2006 $8.73
Dec2005 $4.55
Dec2004 $4.21
Dec2003 $3.55
Dec2002 $4.15
Dec2001 $1.26
Dec2000 $4.31
Dec1999 $4.15
Dec1998 $3.60

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $9.29
Dec2017 $8.34
Dec2016 $7.20
Dec2015 $6.96
Dec2014 $6.54
Dec2013 $5.95
Dec2012 $5.01
Dec2011 $4.71
Dec2010 $4.49
Dec2009 $4.44
Dec2008 $4.61
Dec2007 $5.49
Dec2006 $5.72
Dec2005 $3.99
Dec2004 $3.64
Dec2003 $3.39
Dec2002 $3.37

Recommended Reading:

Other ModernGraham posts about the company

PNC Financial Services Group Inc Valuation – March 2018 $PNC
10 Stocks for Using A Benjamin Graham Value Investing Strategy – January 2017
10 Low PE Stock Picks for the Defensive Investor – August 2016
Best Stocks to Invest In: the Bank Industry – August 2016
5 Companies for Defensive Investors Near 52 Week Lows – Aug 2016

Other ModernGraham posts about related companies

KeyCorp Valuation – January 2019 $KEY
Citigroup Inc Valuation – January 2019 $C
People’s United Financial Inc Valuation – January 2019 $PBCT
JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF
Synovus Financial Corp Valuation – August 2018 $SNV

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

KeyCorp Valuation – January 2019 $KEY

Company Profile (excerpt from Reuters): KeyCorp, incorporated on December 31, 1958, is a bank holding company. The Company is a bank-based financial services company. The Company operates through its subsidiary, KeyBank National Association (KeyBank), which is engaged in providing banking services. Through KeyBank and other subsidiaries, the Company provides a range of retail and commercial banking, commercial leasing, investment management, consumer finance, commercial mortgage servicing and special servicing, and investment banking products and services to individual, corporate and institutional clients. The Company’s segments include Key Community Bank and Key Corporate Bank. Its Other Segments consist of corporate treasury, principal investing unit and various exit portfolios.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of KEY – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $16,511,098,839 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -455.34% Fail
5. Moderate PEmg Ratio PEmg < 20 12.83 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.10 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.24
MG Growth Estimate 5.46%
MG Value $24.16
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $18.04
MG Value based on 0% Growth $10.57
Market Implied Growth Rate 2.16%
Current Price $15.96
% of Intrinsic Value 66.06%

KeyCorp is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.91 in 2014 to an estimated $1.24 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.16% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into KeyCorp revealed the company was trading below its Graham Number of $22.58. The company pays a dividend of $0.38 per share, for a yield of 2.4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 12.83, which was below the industry average of 14.65, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

KeyCorp fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $22.58
PEmg 12.83
PB Ratio 1.10
Dividend Yield 2.38%
TTM Dividend $0.38
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $13,849,000,000
Total Assets $138,805,000,000
Intangible Assets $2,854,000,000
Total Liabilities $123,595,000,000
Shares Outstanding (Diluted Average) 1,049,976,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.73
Dec2017 $1.13
Dec2016 $0.80
Dec2015 $1.05
Dec2014 $0.99
Dec2013 $0.97
Dec2012 $0.89
Dec2011 $0.87
Dec2010 $0.44
Dec2009 -$2.34
Dec2008 -$3.36
Dec2007 $2.32
Dec2006 $2.57
Dec2005 $2.73
Dec2004 $2.30
Dec2003 $2.12
Dec2002 $2.27
Dec2001 $0.31
Dec2000 $2.30
Dec1999 $2.45
Dec1998 $2.23

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.24
Dec2017 $1.00
Dec2016 $0.93
Dec2015 $0.98
Dec2014 $0.91
Dec2013 $0.64
Dec2012 $0.08
Dec2011 -$0.35
Dec2010 -$0.67
Dec2009 -$0.69
Dec2008 $0.53
Dec2007 $2.45
Dec2006 $2.48
Dec2005 $2.27
Dec2004 $1.98
Dec2003 $1.84
Dec2002 $1.77

Recommended Reading:

Other ModernGraham posts about the company

KeyCorp Valuation – March 2018 $KEY
9 Best Stocks For Value Investors This Week – 6/24/16
KeyCorp Valuation – June 2016 $KEY
Best Stocks to Invest In: the Bank Industry – August 2016
Stocks Trading Below Their Graham Number – July 2016

Other ModernGraham posts about related companies

Citigroup Inc Valuation – January 2019 $C
People’s United Financial Inc Valuation – January 2019 $PBCT
JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF
Synovus Financial Corp Valuation – August 2018 $SNV
Columbia Banking System Inc Valuation – August 2018 $COLB

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Citigroup Inc Valuation – January 2019 $C

Company Profile (excerpt from Reuters): Citigroup Inc. (Citi), incorporated on March 8, 1988, is a financial services holding company. The Company’s whose businesses provide consumers, corporations, governments and institutions with a range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, trade and securities services and wealth management. The Company operates through two segments: Citicorp and Citi Holdings. Citicorp is the Company’s global bank for consumers and businesses and represents its core franchises. Citicorp is focused on providing products and services to customers and leveraging the Company’s global network, including various economies. As of December 31, 2016, Citicorp was present in 97 countries and jurisdictions, and offered services in over 160 countries and jurisdictions. Citicorp consists of the operating businesses, including Global Consumer Banking (consists of consumer banking businesses in North America, Latin America (consisting of Citi’s consumer banking businesses in Mexico) and Asia), and Institutional Clients Group (which includes Banking and Markets and securities services).

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of C – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $134,635,015,418 Pass
2. Earnings Stability Positive EPS for 10 years prior Fail
3. Dividend Record Dividend Payments for 10 years prior Fail
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end -1093.98% Fail
5. Moderate PEmg Ratio PEmg < 20 17.30 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.69 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Fail
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.19
MG Growth Estimate 0.42%
MG Value $29.77
Opinion Overvalued
MG Grade D+
MG Value based on 3% Growth $46.20
MG Value based on 0% Growth $27.08
Market Implied Growth Rate 4.40%
Current Price $55.13
% of Intrinsic Value 185.16%

Citigroup Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor has concerns regarding the lack of earnings stability over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $3.1 in 2014 to an estimated $3.19 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 4.4% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Citigroup Inc revealed the company was trading below its Graham Number of $101.71. The company pays a dividend of $0.96 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 17.3, which was above the industry average of 14.65.

Citigroup Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D+.

Stage 3: Information for Further Research

Graham Number $101.71
PEmg 17.30
PB Ratio 0.69
Dividend Yield 1.74%
TTM Dividend $0.96
Number of Consecutive Years of Dividend Growth 3

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $235,270,000,000
Total Assets $1,925,165,000,000
Intangible Assets $27,403,000,000
Total Liabilities $1,727,302,000,000
Shares Outstanding (Diluted Average) 2,481,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $6.51
Dec2017 -$2.98
Dec2016 $4.72
Dec2015 $5.40
Dec2014 $2.20
Dec2013 $4.34
Dec2012 $2.44
Dec2011 $3.63
Dec2010 $3.54
Dec2009 -$8.00
Dec2008 -$56.30
Dec2007 $7.20
Dec2006 $43.10
Dec2005 $47.50
Dec2004 $32.60
Dec2003 $34.20
Dec2002 $29.40
Dec2001 $27.20
Dec2000 $26.20
Dec1999 $21.70
Dec1998 $13.10

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.19
Dec2017 $1.93
Dec2016 $4.19
Dec2015 $3.82
Dec2014 $3.10
Dec2013 $2.76
Dec2012 -$2.33
Dec2011 -$6.47
Dec2010 -$8.38
Dec2009 -$7.33
Dec2008 $0.28
Dec2007 $30.02
Dec2006 $40.07
Dec2005 $37.10
Dec2004 $31.24
Dec2003 $29.62
Dec2002 $26.06

Recommended Reading:

Other ModernGraham posts about the company

Citigroup Inc Valuation – March 2018 $C
Best Stocks Below Their Graham Number – August 2017
Best Stocks Below Their Graham Number – March 2017
Best Stocks Below Their Graham Number – February 2017
10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017

Other ModernGraham posts about related companies

JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF
Synovus Financial Corp Valuation – August 2018 $SNV
Columbia Banking System Inc Valuation – August 2018 $COLB
Canadian Imperial Bank of Commerce Valuation – July 2018 $TSE:CM
ServisFirst Bancshares Inc Valuation – July 2018 $SFBS

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

People’s United Financial Inc Valuation – January 2019 $PBCT

Company Profile (excerpt from Reuters): People’s United Financial, Inc., incorporated on November 2, 2006, is a bank holding company and a financial holding company of People’s United Bank (the Bank). The Bank is engaged in providing commercial banking, retail banking and wealth management services to individual, corporate and municipal customers. The Company operates through two segments: Commercial Banking and Retail Banking. Commercial Banking segment is engaged in commercial real estate lending, commercial and industrial lending, and commercial deposit gathering activities. It also offers cash management, correspondent banking, municipal banking, institutional trust services, corporate trust, insurance services and private banking, among others. Retail Banking segment provides consumer lending (including residential mortgage and home equity lending) and consumer deposit gathering activities. The Retail Banking segment also includes brokerage, financial advisory services, investment management services, and life insurance and non-institutional trust services.

PBCT Chart

PBCT data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of PBCT – January 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $5,586,245,271 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 192.59% Pass
5. Moderate PEmg Ratio PEmg < 20 14.28 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.86 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.04
MG Growth Estimate 6.90%
MG Value $23.12
Opinion Undervalued
MG Grade A+
MG Value based on 3% Growth $15.03
MG Value based on 0% Growth $8.81
Market Implied Growth Rate 2.89%
Current Price $14.80
% of Intrinsic Value 64.01%

People’s United Financial, Inc. qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $0.71 in 2014 to an estimated $1.04 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.89% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into People’s United Financial, Inc. revealed the company was trading below its Graham Number of $21.65. The company pays a dividend of $0.69 per share, for a yield of 4.6%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 14.28, which was below the industry average of 14.65, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

People’s United Financial, Inc. fares extremely well in the ModernGraham grading system, scoring an A+.

Stage 3: Information for Further Research

Graham Number $21.65
PEmg 14.28
PB Ratio 0.86
Dividend Yield 4.65%
TTM Dividend $0.69
Number of Consecutive Years of Dividend Growth 20

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $3,281,300,000
Total Assets $44,133,200,000
Intangible Assets $2,568,900,000
Total Liabilities $38,174,300,000
Shares Outstanding (Diluted Average) 345,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.27
Dec2017 $0.97
Dec2016 $0.92
Dec2015 $0.86
Dec2014 $0.84
Dec2013 $0.74
Dec2012 $0.72
Dec2011 $0.55
Dec2010 $0.23
Dec2009 $0.30
Dec2008 $0.41
Dec2007 $0.52
Dec2006 $0.41
Dec2005 $0.46
Dec2004 $0.68
Dec2003 $0.22
Dec2002 $0.19
Dec2001 $0.26
Dec2000 $0.38
Dec1999 $0.81
Dec1998 $0.64

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.04
Dec2017 $0.90
Dec2016 $0.85
Dec2015 $0.79
Dec2014 $0.71
Dec2013 $0.60
Dec2012 $0.50
Dec2011 $0.39
Dec2010 $0.34
Dec2009 $0.40
Dec2008 $0.46
Dec2007 $0.48
Dec2006 $0.44
Dec2005 $0.42
Dec2004 $0.38
Dec2003 $0.28
Dec2002 $0.36

Recommended Reading:

Other ModernGraham posts about the company

Best Dividend Paying Stocks for Dividend Growth Investors – August 2018
Best Dividend Paying Stocks for Dividend Growth Investors – June 2018
10 Undervalued Companies for the Defensive Dividend Stock Investor – June 2018
Best Dividend Paying Stocks for Dividend Growth Investors – April 2018
People’s United Financial Inc Valuation – March 2018 $PBCT

Other ModernGraham posts about related companies

JPMorgan Chase & Co Valuation – November 2018 $JPM
CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF
Synovus Financial Corp Valuation – August 2018 $SNV
Columbia Banking System Inc Valuation – August 2018 $COLB
Canadian Imperial Bank of Commerce Valuation – July 2018 $TSE:CM
ServisFirst Bancshares Inc Valuation – July 2018 $SFBS

Disclaimer:

The author held a long position in PBCT but did not hold a position in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

JPMorgan Chase & Co Valuation – November 2018 $JPM

Company Profile (excerpt from Reuters): JPMorgan Chase & Co. (JPMorgan Chase), incorporated on October 28, 1968, is a financial holding company. The Company is engaged in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing and asset management. JPMorgan Chase’s activities are organized into four business segments, as well as a Corporate segment. The Company’s segments include Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. Its principal bank subsidiaries include JPMorgan Chase Bank, National Association (JPMorgan Chase Bank, N.A.), a national banking association, and Chase Bank USA, National Association (Chase Bank USA, N.A.), a national banking association that is the Company’s credit card-issuing bank. JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities LLC (JPMorgan Securities), the United States investment banking firm. The bank and nonbank subsidiaries of JPMorgan Chase operate nationally, as well as through overseas branches and subsidiaries, representative offices and subsidiary foreign banks. The Company’s principal operating subsidiary in the United Kingdom is J.P. Morgan Securities plc, a subsidiary of JPMorgan Chase Bank, N.A.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of JPM – November 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $365,761,960,005 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 103.55% Pass
5. Moderate PEmg Ratio PEmg < 20 15.35 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.44 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.17
MG Growth Estimate 7.29%
MG Value $165.46
Opinion Undervalued
MG Grade A-
MG Value based on 3% Growth $103.92
MG Value based on 0% Growth $60.92
Market Implied Growth Rate 3.42%
Current Price $109.99
% of Intrinsic Value 66.48%

JPMorgan Chase & Co. qualifies for both the Defensive Investor and the Enterprising Investor. In fact, the company meets all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position . The Enterprising Investor has no initial concerns. As a result, all value investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Undervalued after growing its EPSmg (normalized earnings) from $4.82 in 2014 to an estimated $7.17 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.42% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into JPMorgan Chase & Co. revealed the company was trading below its Graham Number of $118.31. The company pays a dividend of $2.12 per share, for a yield of 1.9% Its PEmg (price over earnings per share – ModernGraham) was 15.35, which was below the industry average of 16.94, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

JPMorgan Chase & Co. fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $118.31
PEmg 15.35
PB Ratio 1.44
Dividend Yield 1.93%
TTM Dividend $2.12
Number of Consecutive Years of Dividend Growth 7

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 9/1/2018
Long-Term Debt & Capital Lease Obligation $270,124,000,000
Total Assets $2,615,183,000,000
Intangible Assets $54,697,000,000
Total Liabilities $2,356,227,000,000
Shares Outstanding (Diluted Average) 3,394,300,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $9.28
Dec2017 $6.31
Dec2016 $6.19
Dec2015 $6.00
Dec2014 $5.29
Dec2013 $4.34
Dec2012 $5.20
Dec2011 $4.48
Dec2010 $3.96
Dec2009 $2.26
Dec2008 $1.35
Dec2007 $4.38
Dec2006 $4.04
Dec2005 $2.38
Dec2004 $1.55
Dec2003 $3.24
Dec2002 $0.80
Dec2001 $0.80
Dec2000 $2.86
Dec1999 $3.69
Dec1998 $2.83

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.17
Dec2017 $5.95
Dec2016 $5.65
Dec2015 $5.27
Dec2014 $4.82
Dec2013 $4.41
Dec2012 $4.11
Dec2011 $3.47
Dec2010 $3.05
Dec2009 $2.69
Dec2008 $2.85
Dec2007 $3.44
Dec2006 $2.78
Dec2005 $2.01
Dec2004 $1.84
Dec2003 $2.08
Dec2002 $1.73

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Other ModernGraham posts about related companies

CVB Financial Corp Valuation – September 2018 $CVBF
Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF
Synovus Financial Corp Valuation – August 2018 $SNV
Columbia Banking System Inc Valuation – August 2018 $COLB
Canadian Imperial Bank of Commerce Valuation – July 2018 $TSE:CM
ServisFirst Bancshares Inc Valuation – July 2018 $SFBS
Cullen/Frost Bankers Inc Valuation – July 2018 $CFR

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

CVB Financial Corp Valuation – September 2018 $CVBF

Company Profile (excerpt from Reuters): CVB Financial Corp. (CVB), incorporated on April 27, 1981, is the bank holding company for Citizens Business Bank (the Bank). The Bank operates through two segments: Business Financial and Commercial Banking Centers (Centers), and Other Operations. The Company’s all administrative and other smaller operating departments are combined into the Other segment. As of August 10, 2018, the Bank operated through 67 banking centers and three trust office locations serving the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California. Its trust offices are located in Ontario, Newport Beach and Pasadena. These offices serve as sales offices for the Bank’s wealth management, trust and investment products.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CVBF – September 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $2,635,094,908 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 49.48% Pass
5. Moderate PEmg Ratio PEmg < 20 24.95 Fail
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.43 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $0.96
MG Growth Estimate 1.71%
MG Value $11.41
Opinion Overvalued
MG Grade C
MG Value based on 3% Growth $13.88
MG Value based on 0% Growth $8.14
Market Implied Growth Rate 8.23%
Current Price $23.89
% of Intrinsic Value 209.33%

CVB Financial Corp. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg ratio. The Enterprising Investor has no initial concerns. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $0.86 in 2014 to an estimated $0.96 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.23% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into CVB Financial Corp. revealed the company was trading above its Graham Number of $14.63. The company pays a dividend of $0.54 per share, for a yield of 2.3%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 24.95, which was above the industry average of 19.22.

CVB Financial Corp. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Graham Number $14.63
PEmg 24.95
PB Ratio 2.43
Dividend Yield 2.26%
TTM Dividend $0.54
Number of Consecutive Years of Dividend Growth 1

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Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2018
Long-Term Debt & Capital Lease Obligation $25,774,000
Total Assets $8,093,863,000
Intangible Assets $122,743,000
Total Liabilities $7,010,446,000
Shares Outstanding (Diluted Average) 110,355,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $0.98
Dec2017 $0.95
Dec2016 $0.94
Dec2015 $0.93
Dec2014 $0.98
Dec2013 $0.91
Dec2012 $0.74
Dec2011 $0.77
Dec2010 $0.59
Dec2009 $0.56
Dec2008 $0.75
Dec2007 $0.72
Dec2006 $0.83
Dec2005 $0.83
Dec2004 $0.73
Dec2003 $0.63
Dec2002 $0.59
Dec2001 $0.48
Dec2000 $0.42
Dec1999 $0.32
Dec1998 $0.29

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $0.96
Dec2017 $0.94
Dec2016 $0.93
Dec2015 $0.90
Dec2014 $0.86
Dec2013 $0.77
Dec2012 $0.69
Dec2011 $0.67
Dec2010 $0.65
Dec2009 $0.70
Dec2008 $0.77
Dec2007 $0.77
Dec2006 $0.77
Dec2005 $0.71
Dec2004 $0.62
Dec2003 $0.54
Dec2002 $0.47

Recommended Reading:

Other ModernGraham posts about the company

CVB Financial Corp Valuation – Initial Coverage $CVBF

Other ModernGraham posts about related companies

Customers Bancorp Inc Valuation – September 2018 $CUBI
Sterling Bancorp Valuation – August 2018 $STL
S&T Bancorp Inc Valuation – August 2018 $STBA
Central Pacific Financial Corp Valuation – August 2018 $CPF
Synovus Financial Corp Valuation – August 2018 $SNV
Columbia Banking System Inc Valuation – August 2018 $COLB
Canadian Imperial Bank of Commerce Valuation – July 2018 $TSE:CM
ServisFirst Bancshares Inc Valuation – July 2018 $SFBS
Cullen/Frost Bankers Inc Valuation – July 2018 $CFR
Signature Bank Valuation – July 2018 $SBNY

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

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