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
13 Best Stocks For Value Investors This Week – 10/3/15
Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN

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Citigroup Inc Valuation – January 2019 $C
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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 – March 2018 $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.

HBAN Chart

HBAN data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of HBAN – March 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 $17,227,469,674 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 -152.43% Fail
5. Moderate PEmg Ratio PEmg < 20 17.23 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.81 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 $0.93
MG Growth Estimate 6.15%
MG Value $19.41
Opinion Fairly Valued
MG Grade B-
MG Value based on 3% Growth $13.52
MG Value based on 0% Growth $7.93
Market Implied Growth Rate 4.37%
Current Price $16.07
% of Intrinsic Value 82.80%

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 Fairly Valued after growing its EPSmg (normalized earnings) from $0.66 in 2014 to an estimated $0.93 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 4.37% 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 within a margin of safety relative to the price.

At the time of valuation, further research into Huntington Bancshares Incorporated revealed the company was trading above its Graham Number of $15.07. The company pays a dividend of $0.35 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 17.23, which was below the industry average of 24.17, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Huntington Bancshares Incorporated performs fairly well in the ModernGraham grading system, scoring a B-.

Stage 3: Information for Further Research

Graham Number $15.07
PEmg 17.23
PB Ratio 1.81
Dividend Yield 2.18%
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 12/1/2017
Long-Term Debt & Capital Lease Obligation $12,931,000,000
Total Assets $104,185,000,000
Intangible Assets $2,577,000,000
Total Liabilities $93,371,000,000
Shares Outstanding (Diluted Average) 1,221,110,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $1.11
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 $0.93
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
13 Best Stocks For Value Investors This Week – 10/3/15
Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN

Other ModernGraham posts about related companies

PNC Financial Services Group Inc Valuation – March 2018 $PNC
KeyCorp Valuation – March 2018 $KEY
Canadian Western Bank Valuation – March 2018 $TSE-CWB
Simmons First National Corp Valuation – March 2018 $SFNC
Citigroup Inc Valuation – March 2018 $C
People’s United Financial Inc Valuation – March 2018 $PBCT
JPMorgan Chase & Co Valuation – February 2018 $JPM
Opus Bank Valuation – Initial Coverage $OPB
Wells Fargo & Co Valuation – August 2017 $WFC
Old National Bancorp Valuation – Initial Coverage $ONB

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 – June 2016 $HBAN

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 Companies Benjamin Graham Would Invest In Today – June 2016.  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 Huntington Bancshares Inc (HBAN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Huntington Bancshares Incorporated is a diversified regional bank holding company. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), the Company is engaged in providing commercial, small business, consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, customized insurance programs, and other financial products and services. It operates through five segments: Retail and Business Banking, Commercial Banking, Automobile Finance and Commercial Real Estate, Regional Banking and The Huntington Private Client Group, and Home Lending. The Company offers commercial and industrial loans, commercial real estate loans, automobile loans, home equity loans, residential mortgage loans and other consumer loans. It offers demand deposits-noninterest-bearing, demand deposits-interest-bearing, money market deposits, and savings and other domestic deposits.

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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. Here is a free sample valuation pdf, and 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 HBAN – June 2016

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 $6,280,139,226 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 -136.65% Fail
5. Moderate PEmg Ratio PEmg < 20 11.23 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.97 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

HBAN value Chart June 2016

EPSmg $0.77
MG Growth Estimate 15.00%
MG Value $29.52
Opinion Undervalued
MG Grade B
MG Value based on 3% Growth $11.12
MG Value based on 0% Growth $6.52
Market Implied Growth Rate 1.37%
Current Price $8.61
% of Intrinsic Value 29.17%

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 $-0.42 in 2012 to an estimated $0.77 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.37% 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.

Huntington Bancshares Incorporated performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

HBAN Charts June 2016

Graham Number $11.94
PEmg 11.23
PB Ratio 0.97
Dividend Yield 3.02%
TTM Dividend $0.26
Number of Consecutive Years of Dividend Growth 6

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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 3/1/2016
Long-Term Debt $7,935,412,000
Total Assets $72,644,967,000
Intangible Assets $896,783,000
Total Liabilities $65,487,297,000
Shares Outstanding (Diluted Average) 808,349,000

Earnings Per Share History

Next Fiscal Year Estimate $0.79
Dec2015 $0.81
Dec2014 $0.72
Dec2013 $0.72
Dec2012 $0.71
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 $1.49
Dec2001 $0.71
Dec2000 $1.32
Dec1999 $1.66
Dec1998 $1.17
Dec1997 $1.14
Dec1996 $1.23

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $0.77
Dec2015 $0.74
Dec2014 $0.67
Dec2013 $0.16
Dec2012 -$0.42
Dec2011 -$1.02
Dec2010 -$1.50
Dec2009 -$1.74
Dec2008 $0.65
Dec2007 $1.28
Dec2006 $1.77
Dec2005 $1.61
Dec2004 $1.48
Dec2003 $1.36
Dec2002 $1.25
Dec2001 $1.15
Dec2000 $1.35

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
13 Best Stocks For Value Investors This Week – 10/3/15
Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN

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State Street Corp Valuation – June 2016 $STT
KeyCorp Valuation – June 2016 $KEY
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BB&T Corporation Valuation – May 2016 $BBT
SunTrust Banks Inc Valuation – February 2016 $STI
Comerica Inc Stock Valuation – February 2016 $CMA
U.S. Bancorp Valuation – February 2016 $USB
JP Morgan Chase Valuation – January 2016 Update $JPM
Comerica Inc Stock Valuation – February 2016 $CMA

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 Valuation – January 2016 Update $HBAN

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 Most Undervalued Companies for the Defensive Investor – November 2015.  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 Huntington Bancshares (HBAN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Huntington Bancshares Incorporated (Huntington) is a diversified regional bank holding company. The Company operates through its subsidiary, The Huntington National Bank (the Bank). It provides commercial, small business, consumer and mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, insurance programs, and other financial products and services. It operates in five segments: Retail and Business Banking, Commercial Banking, Automobile Finance and Commercial Real Estate, Regional Banking and The Huntington Private Client Group, and Home Lending. Its loan portfolio includes commercial and industrial, commercial real estate, construction CRE, automobile, home equity, residential mortgage and consumer loans/leases. The Bank has approximately 14 private client group offices and 715 branches, including 404 in Ohio, 43 in Indiana, 179 in Michigan, 31 in West Virginia, 48 in Pennsylvania and 10 in Kentucky.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

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. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[level-mg-stocks-screens-subscriber]

Downloadable PDF version of this valuation:

ModernGraham Valuation of HBAN – January 2016

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 $8,877,427,229 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 29.48% Fail
5. Moderate PEmg Ratio PEmg < 20 14.52 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.32 Pass
Score
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

HBAN value Chart January 2016

EPSmg $0.74
MG Growth Estimate 15.00%
MG Value $28.36
Opinion Undervalued
MG Value based on 3% Growth $10.68
MG Value based on 0% Growth $6.26
Market Implied Growth Rate 3.01%
Current Price $10.70
% of Intrinsic Value 37.73%

Huntington Bancshares qualifies 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 based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from a loss of $1.02 in 2011 to an estimated gain of $0.74 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.01% 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.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Huntington Bancshares (HBAN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

HBAN Charts January 2016

Graham Number $11.83
PEmg 14.52
PB Ratio 1.32
Dividend Yield 2.24%
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 Sep15
Long-Term Debt $6,359,445,000
Total Assets $70,210,180,000
Intangible Assets $735,662,000
Total Liabilities $63,627,540,000
Shares Outstanding (Diluted Average) 814,326,000

Earnings Per Share History

Next Fiscal Year Estimate $0.80
Dec14 $0.72
Dec13 $0.72
Dec12 $0.71
Dec11 $0.59
Dec10 $0.19
Dec09 -$6.14
Dec08 -$0.44
Dec07 $0.25
Dec06 $1.92
Dec05 $1.77
Dec04 $1.71
Dec03 $1.61
Dec02 $1.33
Dec01 $0.54
Dec00 $1.29
Dec99 $1.62
Dec98 $1.17
Dec97 $1.25
Dec96 $1.29
Dec95 $1.11

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $0.74
Dec14 $0.67
Dec13 $0.16
Dec12 -$0.42
Dec11 -$1.02
Dec10 -$1.50
Dec09 -$1.74
Dec08 $0.65
Dec07 $1.28
Dec06 $1.76
Dec05 $1.58
Dec04 $1.42
Dec03 $1.28
Dec02 $1.14
Dec01 $1.09
Dec00 $1.35
Dec99 $1.35

Recommended Reading:

Other ModernGraham posts about the company

Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN
The 8 Best Stocks For Value Investors This Week – 6/27/15
Huntington Bancshares Analysis – June 2015 Update $HBAN
24 Companies in the Spotlight This Week – 3/28/15
Huntington Bancshares Inc. Quarterly Valuation – March 2015 $HBAN

Other ModernGraham posts about related companies

Wells Fargo & Co Valuation – December 2015 Update $WFC
Citigroup Inc Valuation – December 2015 Update $C
People’s United Financial Corp Valuation – December 2015 Update $PBCT
M&T Bank Corp Valuation – December 2015 Update $MTB
KeyCorp Valuation – November 2015 Update $KEY
State Street Corp Valuation – November 2015 Update $STT
BB&T Corporation Valuation – November 2015 Update $BBT
PNC Financial Services Group Valuation – November 2015 Update $PNC
SunTrust Banks Inc. Valuation – November 2015 Update $STI
U.S. Bancorp Valuation – November 2015 Update $USB

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. Analysis – October 2015 Update $HBAN

In the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.

We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.

In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  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.  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 specific look at how Huntington Bancshares (HBAN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Huntington Bancshares Incorporated (Huntington) is a diversified regional bank holding company. The Company operates through its subsidiary, The Huntington National Bank (the Bank). It provides commercial, small business, consumer and mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, insurance programs, and other financial products and services. It operates in five segments: Retail and Business Banking, Commercial Banking, Automobile Finance and Commercial Real Estate, Regional Banking and The Huntington Private Client Group, and Home Lending. Its loan portfolio includes commercial and industrial, commercial real estate, construction CRE, automobile, home equity, residential mortgage and consumer loans/leases. The Bank has approximately 14 private client group offices and 715 branches, including 404 in Ohio, 43 in Indiana, 179 in Michigan, 31 in West Virginia, 48 in Pennsylvania and 10 in Kentucky.
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Downloadable PDF version of this valuation:

ModernGraham Valuation of HBAN – October 2015

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 $8,368,291,537 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 31.79% Fail
5. Moderate PEmg Ratio PEmg < 20 14.20 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.34 Pass
Score
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

HBAN value Chart October 2015

EPSmg $0.75
MG Growth Estimate 15.00%
MG Value $28.88
Opinion Undervalued
MG Value based on 3% Growth $10.88
MG Value based on 0% Growth $6.38
Market Implied Growth Rate 2.85%
Current Price $10.65
% of Intrinsic Value 36.88%

Huntington Bancshares qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor has concerns regarding the insufficient earnings growth or stability over the last ten years while the Enterprising Investor has no initial concerns.  As a result, all value investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with the next stage of the analysis.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from a loss of $1.02 in 2011 to an estimated gain of $0.75 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.85% 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.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Huntington Bancshares (HBAN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

HBAN Charts October 2015

Graham Number $11.95
PEmg 14.20
PB Ratio 1.34
Dividend Yield 2.16%
Number of Consecutive Years of Dividend Growth 5

 

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Most Recent Balance Sheet Figures

Long-Term Debt $5,854,584,000
Total Assets $68,845,650,000
Intangible Assets $741,074,000
Total Liabilities $62,349,390,000
Shares Outstanding (Diluted Average) 820,238,000

Earnings Per Share History

Next Fiscal Year Estimate $0.84
Dec14 $0.72
Dec13 $0.72
Dec12 $0.71
Dec11 $0.59
Dec10 $0.19
Dec09 -$6.14
Dec08 -$0.44
Dec07 $0.25
Dec06 $1.92
Dec05 $1.77
Dec04 $1.71
Dec03 $1.61
Dec02 $1.49
Dec01 $0.71
Dec00 $1.32
Dec99 $1.66
Dec98 $1.17
Dec97 $1.14
Dec96 $1.23
Dec95 $1.11

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $0.75
Dec14 $0.67
Dec13 $0.16
Dec12 -$0.42
Dec11 -$1.02
Dec10 -$1.50
Dec09 -$1.74
Dec08 $0.65
Dec07 $1.28
Dec06 $1.77
Dec05 $1.61
Dec04 $1.48
Dec03 $1.36
Dec02 $1.25
Dec01 $1.15
Dec00 $1.35
Dec99 $1.33

Recommended Reading:

Other ModernGraham posts about the company

The 8 Best Stocks For Value Investors This Week – 6/27/15
Huntington Bancshares Analysis – June 2015 Update $HBAN
24 Companies in the Spotlight This Week – 3/28/15
Huntington Bancshares Inc. Quarterly Valuation – March 2015 $HBAN
Huntington Bancshares Inc. (HBAN) Annual Valuation – 2014

Other ModernGraham posts about related companies

JPMorgan Chase & Co. Analysis – September 2015 Update $JPM
Citigroup Inc. Analysis – September 2015 Update $C
Wells Fargo & Co. Analysis – September 2015 Update $WFC
People’s United Financial Inc. Analysis – August 2015 Update $PBCT
M&T Bank Corporation Analysis – August 2015 Update $MTB
KeyCorp Analysis – August 2015 Update $KEY
State Street Corporation Analysis – August 2015 Update $STT
BB&T Corporation Analysis – August 2015 Update $BBT
PNC Financial Services Group Inc. Analysis – August 2015 Update $PNC
US Bancorp Analysis – August 2015 Update $USB

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 review our detailed disclaimer.

Huntington Bancshares Analysis – June 2015 Update $HBAN

Huntington_logo

Huntington Bancshares passes the initial requirements of the Enterprising Investor but not the more conservative Defensive Investor. Specifically, the Defensive Investor is concerned by the insufficient earnings growth and stability over the last ten years, while the Enterprising Investor has no initial concerns. As a result, all Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

When it comes to that valuation, it is critical to consider the company’s earnings history. In this case, it has grown its EPSmg (normalized earnings) from a loss of $1.02 in 2011 to an estimated gain of $0.73 for 2015. This level of demonstrated growth outpaces the market’s implied estimate for annual earnings growth of 3.69% over the next 7-10 years.

In recent years, the company’s actual growth in EPSmg has averaged around 34% annually, and while the ModernGraham valuation model reduces the actual growth to a more conservative figure when making an estimate, it still returns an estimate of intrinsic value well above the current price, indicating that Huntington Bancshares is significantly undervalued at the present time.

Read the full valuation on Guru Focus!


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. Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

Huntington Bancshares Inc. Quarterly Valuation – March 2015 $HBAN

Huntington_logoIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to whittle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  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.  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 specific look at how Huntington Bancshares Inc. (HBAN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Huntington Bancshares Incorporated (Huntington) is a multi-state diversified regional bank holding company. The Company operates through its subsidiary, The Huntington National Bank (the Bank), and provides commercial, small business, consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, insurance programs and other financial products and services. The Company operates in four segments namely Retail and Business Banking, Regional and Commercial Banking, Automobile Finance and Commercial Real Estate and Wealth Advisors, Government Finance and Home Lending. Its loan portfolio includes commercial and industrial, commercial real estate, construction CRE, automobile, home equity, residential mortgage and consumer loans/leases. As of December 31, 2013, the Bank had 16 wealth management offices and 695 branches in Ohio, Indiana, Michigan, West Virginia, Pennsylvania and Kentucky.

Defensive Investor – must pass all 6 of the following tests: Score = 4/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – PASS
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 3/3

  1. Earnings Stability – positive earnings per share for at least 5 years – PASS
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $11.20
MG Value $25.62
MG Opinion Undervalued
Value Based on 3% Growth $9.65
Value Based on 0% Growth $5.66
Market Implied Growth Rate 4.17%
PEmg 16.83
PB Ratio 1.47

Balance Sheet – December 2014

Total Debt $5,661,000,000
Total Assets $66,298,000,000
Intangible Assets $597,000,000
Total Liabilities $59,970,000,000
Outstanding Shares 830,500,000

Earnings Per Share

2014 $0.72
2013 $0.72
2012 $0.71
2011 $0.59
2010 $0.19
2009 -$6.14
2008 -$0.44
2007 $0.25
2006 $1.92
2005 $1.77
2004 $1.71

Earnings Per Share – ModernGraham 

2014 $0.67
2013 $0.16
2012 -$0.42
2011 -$1.02
2010 -$1.50
2009 -$1.74

Dividend History

Huntington Bancshares qualifies for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the lack of earnings stability or growth over the last ten years, while the company passes all of the Enterprising Investor’s requirements.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company and comparing it to other opportunities.  As for a valuation, the company appears undervalued after growing its EPSmg (normalized earnings) from a loss of $1.50 in 2010 to a gain of $0.67 for 2014.  This level of demonstrated growth outpaces the market’s implied estimate of 4.17% earnings growth and leads the ModernGraham valuation model, which is based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the market price.

Be sure to check out previous ModernGraham valuations of Huntington Bancshares Inc. (HBAN) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Huntington Bancshares Inc. (HBAN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Huntington Bancshares Inc. (HBAN) or in any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

Huntington Bancshares Inc. (HBAN) Annual Valuation – 2014

Huntington_logoIn the wake of the great financial crisis it can sometimes be difficult for Intelligent Investors to find a solid financial company in which to invest, because they require specific achievements over the historical period.  Many investors may simply decide to throw out the worst years with the rationale that they are outliers that shouldn’t be considered when evaluating the company’s prospects, but doing so would involve speculation.  We don’t know whether the financial crisis will happen again, but we do know that if it does, we can expect to see similar results as we did before.  By continuing to require the same standards for the historical period, Intelligent Investors are able to widdle down banks to only those with the best financial position, and then they are able to determine an intrinsic value to get a sense of whether the company is a good investment.  In addition, a company must have strong financial statements to prove that it is stable enough for Intelligent Investors.  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.  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 specific look at how Huntington Bancshares Inc. fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Huntington Bancshares Incorporated (Huntington) is a multi-state diversified regional bank holding company. Through its subsidiaries, including its bank subsidiary, The Huntington National Bank (the Bank), Huntington is engaged in providing full-service commercial, small business, consumer banking services, mortgage banking services, automobile financing, equipment leasing, investment management, trust services, brokerage services, customized insurance programs, and other financial products and services. The Company operates in four segments: Retail and Business Banking , Regional and Commercial Banking, Automobile Finance and Commercial Real Estate and Wealth Advisors, Government Finance, and Home Lending . In March 2014, the Company announced that it has completed its merger of Camco Financial Corp., parent company of Advantage Bank, based in Cambridge, Ohio.

HBAN Chart

HBAN data by YCharts

Defensive Investor – must pass all 6 of the following tests: Score = 3/6

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  3. Dividend Record – has paid a dividend for at least 10 straight years – PASS
  4. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – FAIL
  5. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  6. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – PASS

Enterprising Investor – must pass all 3 of the following tests or be suitable for a defensive investor: Score = 2/3

  1. Earnings Stability – positive earnings per share for at least 5 years – FAIL
  2. Dividend Record – currently pays a dividend – PASS
  3. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $9.57
MG Value $6.29
MG Opinion Overvalued
Value Based on 3% Growth $2.37
Value Based on 0% Growth $1.39
Market Implied Growth Rate 25.05%
PEmg 58.59
PB Ratio 1.30

Balance Sheet – 12/31/2013

Total Debt $4,258,300,000
Total Assets $59,476,300,000
Intangible Assets $537,500,000
Total Liabilities $53,377,000,000
Outstanding Shares 830,960,000

Earnings Per Share

2013 $0.72
2012 $0.71
2011 $0.59
2010 $0.19
2009 -$6.14
2008 -$0.44
2007 $0.25
2006 $1.92
2005 $1.77
2004 $1.71

Earnings Per Share – ModernGraham 

2013 $0.16
2012 -$0.42
2011 -$1.02
2010 -$1.50
2009 -$1.74
2008 $0.65

Dividend History

HBAN Dividend Chart

HBAN Dividend data by YCharts

Conclusion:

Huntington Bancshares survived the financial crisis, but not without posting some years of earnings losses.  This has led the company to be disqualified from potential investment by the Defensive Investor, as the investor type requires ten years of earnings stability and growth as well as a lower PEmg ratio.  The company also is currently unsuitable for the Enterprising Investor, though if it can post another year of positive earnings it, the Enterprising Investor will become interested.  In the meantime, value investors following the ModernGraham approach should look into other opportunities, such as by reviewing ModernGraham’s valuation of JP Morgan Chase (JPM) and ModernGraham’s valuation of Wells Fargo & Co. (WFC).  The company appears to also be overvalued at the current time, as even though the EPSmg (normalized earnings) have gone from -$1.74 in 2009 to $0.16 for 2013, this level of demonstrated historical growth does not support the market’s implied estimate of 25.05% earnings growth.  As a result, the ModernGraham valuation model returns an estimate of intrinsic value that falls below the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Huntington Bancshares Inc. (HBAN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

If you like our valuations, why not check out ModernGraham Stocks & Screens?  It’s a great way to review the valuations while screening for things like low PE ratio, undervalued companies, etc.!

Disclaimer:  The author did not hold a position in Huntington Bancshares Inc. (HBAN) or any of the other companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours.

Logo taken from the Wikipedia; this article is not affiliated with the company in any manner.

10 Low PE Stock Picks for the Enterprising Investor – March 2019

There are a number of great companies in the market today. By using the ModernGraham Valuation Model, I’ve selected 10 low PE stocks for the Enterprising Investor.  These companies have the lowest PEmg (price / normalized earnings) ratio out of all companies reviewed by ModernGraham. Each company has been determined to be suitable for the Enterprising Investor and undervalued according to the ModernGraham approach.

Defensive Investors are defined as investors who need to select only the companies that present the least amount of risk. Enterprising Investors, on the other hand, are able to select companies that present a moderate (though still low) amount of risk.

LyondellBasell Industries NV (LYB)

LyondellBasell Industries NV is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability or growth over the last ten years, and the poor dividend history. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. 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 $6.13 in 2014 to an estimated $10.84 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.41% annual earnings loss over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into LyondellBasell Industries NV revealed the company was trading above its Graham Number of $77.64. The company pays a dividend of $3.55 per share, for a yield of 4.3%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 7.68, which was below the industry average of 20.47, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-16.01.

LyondellBasell Industries NV performs fairly well in the ModernGraham grading system, scoring a B.  (See the full valuation)

Lincoln National Corporation (LNC)

Lincoln National Corporation is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability 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 $4.25 in 2014 to an estimated $7.01 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.58% annual earnings loss 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 Lincoln National Corporation revealed the company was trading below its Graham Number of $117.31. The company pays a dividend of $0.87 per share, for a yield of 1.7% Its PEmg (price over earnings per share – ModernGraham) was 7.33, which was below the industry average of 30.63, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Lincoln National Corporation performs fairly well in the ModernGraham grading system, scoring a B+.  (See the full valuation)

Synchrony Financial (SYF)

Synchrony Financial is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability 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 $2.22 in 2015 to an estimated $3.36 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.7% 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 Synchrony Financial revealed the company was trading below its Graham Number of $43.03. The company pays a dividend of $0.72 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 9.91, which was below the industry average of 21.22, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Synchrony Financial fares extremely well in the ModernGraham grading system, scoring an A-.  (See the full valuation)

BorgWarner Inc. (BWA)

BorgWarner Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. 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 $2.58 in 2015 to an estimated $3.51 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.72% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value above the price.

At the time of valuation, further research into BorgWarner Inc. revealed the company was trading below its Graham Number of $43.32. The company pays a dividend of $0.68 per share, for a yield of 1.6% Its PEmg (price over earnings per share – ModernGraham) was 11.93, which was below the industry average of 21.23, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-9.33.

BorgWarner Inc. performs fairly well in the ModernGraham grading system, scoring a B+.  (See the full valuation)

Citizens Financial Group Inc (CFG)

Citizens Financial Group Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability 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 $-0.08 in 2015 to an estimated $3.21 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.47% 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 Citizens Financial Group Inc revealed the company was trading below its Graham Number of $60.22. The company pays a dividend of $0.98 per share, for a yield of 2.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 11.44, which was below the industry average of 16.24, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Citizens Financial Group Inc fares extremely well in the ModernGraham grading system, scoring an A-.  (See the full valuation)

Morgan Stanley (MS)

Morgan Stanley is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings stability 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 $1.23 in 2014 to an estimated $3.46 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.9% 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 Morgan Stanley revealed the company was trading below its Graham Number of $63.69. The company pays a dividend of $0.9 per share, for a yield of 2.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 12.29, which was below the industry average of 18, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Morgan Stanley fares extremely well in the ModernGraham grading system, scoring an A-.  (See the full valuation)

Bank of America Corp (BAC)

Bank of America 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 $0.76 in 2015 to an estimated $2.2 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.46% 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 Bank of America Corp revealed the company was trading below its Graham Number of $39.29. The company pays a dividend of $0.54 per share, for a yield of 1.8% Its PEmg (price over earnings per share – ModernGraham) was 13.42, 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.

Bank of America Corp performs fairly well in the ModernGraham grading system, scoring a B+.  (See the full valuation)

KeyCorp (KEY)

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-.  (See the full valuation)

Huntington Bancshares Incorporated (HBAN)

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-.  (See the full valuation)

Regions Financial Corp (RF)

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-.  (See the full valuation)

What do you think?  Are these companies a good value for Enterprising Investors?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:

The author held a long position in Starwood Property Trust Inc (STWD) 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 those holdings within the next 72 hours.  This article is not investment advice and all readers are encouraged to speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not related to the companies mentioned in any capacity.  Please take a moment to read our detailed disclaimer.

Comerica Inc Valuation – March 2019 #CMA

Company Profile (excerpt from Reuters): Comerica Incorporated, incorporated on November 13, 1972, is a financial services company. The Company’s principal activity is lending to and accepting deposits from businesses and individuals. The Company’s segments include the Business Bank, the Retail Bank, Wealth Management, Finance and Other. The Business Bank serves middle market businesses, multinational corporations and governmental entities by offering various products and services, including commercial loans and lines of credit, deposits, cash management, capital market products, international trade finance, letters of credit, foreign exchange management services and loan syndication services. The Retail Bank includes small business banking and personal financial services, consisting of consumer lending, consumer deposit gathering and mortgage loan origination. In addition to a range of financial services provided to small business customers, this business segment offers a range of consumer products, including deposit accounts, installment loans, credit cards, student loans, home equity lines of credit and residential mortgage loans.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CMA – March 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 $12,991,666,519 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 238.83% Pass
5. Moderate PEmg Ratio PEmg < 20 13.98 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.81 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 $5.88
MG Growth Estimate 15.00%
MG Value $226.56
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $85.33
MG Value based on 0% Growth $50.02
Market Implied Growth Rate 2.74%
Current Price $82.27
% of Intrinsic Value 36.31%

Comerica Incorporated 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 $2.85 in 2015 to an estimated $5.88 for 2019. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.74% 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 Comerica Incorporated revealed the company was trading below its Graham Number of $90.55. The company pays a dividend of $1.84 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 13.98, which was below the industry average of 16.75, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Comerica Incorporated fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $90.55
PEmg 13.98
PB Ratio 1.81
Dividend Yield 2.24%
TTM Dividend $1.84
Number of Consecutive Years of Dividend Growth 9

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Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Long-Term Debt & Capital Lease Obligation $6,463,000,000
Total Assets $70,818,000,000
Intangible Assets $0
Total Liabilities $63,311,000,000
Shares Outstanding (Diluted Average) 165,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.77
Dec2018 $7.20
Dec2017 $4.14
Dec2016 $2.68
Dec2015 $2.84
Dec2014 $3.16
Dec2013 $2.85
Dec2012 $2.67
Dec2011 $2.09
Dec2010 $0.88
Dec2009 -$0.79
Dec2008 $1.28
Dec2007 $4.43
Dec2006 $5.49
Dec2005 $5.11
Dec2004 $4.36
Dec2003 $3.75
Dec2002 $3.40
Dec2001 $3.88
Dec2000 $4.31
Dec1999 $4.14

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.88
Dec2018 $4.63
Dec2017 $3.27
Dec2016 $2.84
Dec2015 $2.85
Dec2014 $2.68
Dec2013 $2.14
Dec2012 $1.60
Dec2011 $1.24
Dec2010 $1.30
Dec2009 $2.04
Dec2008 $3.68
Dec2007 $4.79
Dec2006 $4.79
Dec2005 $4.33
Dec2004 $3.94
Dec2003 $3.78

Recommended Reading:

Other ModernGraham posts about the company

Comerica Inc Valuation – June 2018 $CMA
11 Best Stocks for Value Investors This Week – 3/4/17
Comerica Inc Valuation – March 2017 $CMA
21 Best Undervalued Stocks of the Week – 8/27/16
Comerica Inc Valuation – August 2016 $CMA

Other ModernGraham posts about related companies

SVB Financial Group Valuation – March 2019 #SIVB
US Bancorp Valuation – March 2019 #USB
Citizens Financial Group Inc Valuation – February 2019 $CFG
BB&T Corp Valuation – February 2019 $BBT
M&T Bank Corp Valuation – February 2019 $MTB
Bank of America Corp Valuation – January 2019 $BAC
Fifth Third Bancorp Valuation – January 2019 $FITB
Zions Bancorp Valuation – January 2019 $ZION
Regions Financial Corp Valuation – January 2019 $RF
Huntington Bancshares Inc Valuation – January 2019 $HBAN

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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