CI Financial Corp Valuation – July 2018 $TSE:CIX

Company Profile (excerpt from Reuters): CI Financial Corp. (CI) is a wealth management and investment fund company. The Company is engaged in management, marketing, distribution and administration of mutual funds, segregated funds, exchange-traded funds, structured products and other fee-earning investment products for Canadian investors. CI operates through two segments: Asset Management and Asset Administration. The Company’s Asset Management segment provides the majority of CI’s income and derives its revenue principally from the fees earned on the management of various families of mutual, segregated, pooled, exchange-traded and closed-end funds, structured products and discretionary accounts. CI’s Asset Administration segment derives its revenue principally from commissions and fees earned on the sale of mutual funds and other financial products and ongoing service to clients. The Company’s products are distributed primarily through brokers, independent financial planners and insurance advisors, among others.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSE-CIX – July 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 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $6,104,398,878 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 0.81 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 87.77% Pass
6. Moderate PEmg Ratio PEmg < 20 11.17 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 3.41 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 0.81 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 -3.84 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.06
MG Growth Estimate 5.45%
MG Value $39.99
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $29.88
MG Value based on 0% Growth $17.52
Market Implied Growth Rate 1.34%
Current Price $23.02
% of Intrinsic Value 57.57%

CI Financial Corp qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. 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 $1.51 in 2014 to an estimated $2.06 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.34% 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 CI Financial Corp revealed the company was trading above its Graham Number of $20.21. The company pays a dividend of $1.4 per share, for a yield of 6.1%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 11.17, which was below the industry average of 21.47, 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 $-6.06.

CI Financial Corp performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$6.06
Graham Number $20.21
PEmg 11.17
Current Ratio 0.81
PB Ratio 3.41
Current Dividend $1.40
Dividend Yield 6.08%
Number of Consecutive Years of Dividend Growth 8

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 3/1/2018
Total Current Assets $992,498,000
Total Current Liabilities $1,226,032,000
Long-Term Debt $896,323,000
Total Assets $4,450,387,000
Intangible Assets $3,374,753,000
Total Liabilities $2,628,370,000
Shares Outstanding (Diluted Average) 269,970,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.40
Dec2017 $1.89
Dec2016 $1.85
Dec2015 $1.98
Dec2014 $1.84
Dec2013 $1.50
Dec2012 $1.24
Dec2011 $1.31
Dec2010 $1.13
Dec2009 $0.83
Dec2008 $1.61
Dec2007 $2.21
May2006 $1.08
May2005 $0.97
May2004 $0.82
May2003 $0.31
May2002 -$0.35
May2001 $0.06
May2000 -$0.01
May1999 $0.06
May1998 $0.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.06
Dec2017 $1.86
Dec2016 $1.80
Dec2015 $1.70
Dec2014 $1.51
Dec2013 $1.30
Dec2012 $1.21
Dec2011 $1.27
Dec2010 $1.29
Dec2009 $1.36
Dec2008 $1.53
Dec2007 $1.35
May2006 $0.80
May2005 $0.56
May2004 $0.29
May2003 $0.02
May2002 -$0.09

Recommended Reading:

Other ModernGraham posts about the company

CI Financial Corp Valuation – Initial Coverage $TSE-CIX

Other ModernGraham posts about related companies

Canadian General Investments Ltd Valuation – July 2018 $TSE-CGI
SLM Corp Valuation – July 2018 $SLM
IGM Financial Inc Valuation – July 2018 $TSE-IGM
Main Street Capital Corp Valuation – July 2018 $MAIN
Legg Mason Inc Valuation – June 2018 $LM
T. Rowe Price Group Inc Valuation – June 2018 $TROW
Moody’s Corporation – June 2018 $MCO
Charles Schwab Corp Valuation – June 2018 $SCHW
Willis Towers Watson PLC Valuation – Initial Coverage June 2018 $WLTW
PayPal Holdings Inc Valuation – June 2018 $PYPL

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.

BlackRock Inc Valuation – January 2019 $BLK

Company Profile (excerpt from Reuters): BlackRock, Inc. (BlackRock), incorporated on February 13, 2006, is an investment management company. BlackRock provides a range of investment and risk management services to institutional and retail clients worldwide. Its diverse platform of active (alpha) and index (beta) investment strategies across asset classes enables the Company to tailor investment outcomes and asset allocation solutions for clients. Its product offerings include single- and multi-asset portfolios investing in equities, fixed income, alternatives and money market instruments. The Company’s products are offered directly and through intermediaries in a range of vehicles, including open-end and closed-end mutual funds, iShares exchange-traded funds (ETFs), separate accounts, collective investment funds and other pooled investment vehicles. BlackRock offers its Aladdin investment system, as well as risk management, outsourcing, advisory and technology services, to institutional investors and wealth management intermediaries under the BlackRock Solutions (BRS) name. BRS’ Financial Markets Advisory (FMA) group advises global financial institutions, regulators, and government entities across a range of risk, regulatory, capital markets and strategic services. It also offers Aladdin Portfolio Builder, which provides financial advisors with portfolio construction tools, and Aladdin Risk for Wealth Management, which provides intermediary partners with institutional-quality portfolio construction, modeling and risk analytics capabilities.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of BLK – 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 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $62,755,262,079 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.45 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 160.83% Pass
6. Moderate PEmg Ratio PEmg < 20 16.17 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.98 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.45 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.02 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $24.61
MG Growth Estimate 8.03%
MG Value $604.50
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $356.82
MG Value based on 0% Growth $209.17
Market Implied Growth Rate 3.83%
Current Price $397.91
% of Intrinsic Value 65.82%

BlackRock, Inc. qualifies for both the Defensive Investor and the Enterprising Investor. The Defensive Investor is only initially concerned with the low current ratio. The Enterprising Investor is only concerned with the low current ratio. 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 $16.03 in 2014 to an estimated $24.61 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.83% 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 BlackRock, Inc. revealed the company was trading above its Graham Number of $342.93. The company pays a dividend of $10 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 16.17, 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. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-824.96.

BlackRock, Inc. performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$824.96
Graham Number $342.93
PEmg 16.17
Current Ratio 1.45
PB Ratio 1.98
Current Dividend $10.00
Dividend Yield 2.51%
Number of Consecutive Years of Dividend Growth 8

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
Total Current Assets $9,262,000,000
Total Current Liabilities $6,394,000,000
Long-Term Debt $44,000,000
Total Assets $174,862,000,000
Intangible Assets $31,380,000,000
Total Liabilities $142,392,000,000
Shares Outstanding (Diluted Average) 161,378,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $26.45
Dec2017 $30.23
Dec2016 $19.04
Dec2015 $19.79
Dec2014 $19.25
Dec2013 $16.87
Dec2012 $13.79
Dec2011 $12.37
Dec2010 $10.55
Dec2009 $6.11
Dec2008 $5.78
Dec2007 $7.37
Dec2006 $3.87
Dec2005 $3.50
Dec2004 $2.17
Dec2003 $2.36
Dec2002 $2.04
Dec2001 $1.65
Dec2000 $1.35
Dec1999 $1.04
Dec1998 $0.66

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $24.61
Dec2017 $22.80
Dec2016 $18.64
Dec2015 $17.77
Dec2014 $16.03
Dec2013 $13.59
Dec2012 $11.21
Dec2011 $9.42
Dec2010 $7.54
Dec2009 $5.80
Dec2008 $5.28
Dec2007 $4.64
Dec2006 $3.11
Dec2005 $2.60
Dec2004 $2.07
Dec2003 $1.91
Dec2002 $1.57

Recommended Reading:

Other ModernGraham posts about the company

BlackRock Inc Valuation – March 2018 $BLK
10 Undervalued Companies for the Defensive Dividend Stock Investor – January 2017
10 Undervalued Companies for the Defensive Dividend Stock Investor – December 2016
9 Best Stocks For Value Investors This Week – 6/24/16
BlackRock Inc Valuation – June 2016 $BLK

Other ModernGraham posts about related companies

Invesco Ltd Valuation – January 2019 $IVZ
Capital One Financial Corp Valuation – January 2019 $COF
Total System Services Inc Valuation – December 2018 $TSS
Goldman Sachs Group Inc Valuation – November 2018 $GS
KKR & Co Inc Valuation – September 2018 $KKR
CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX

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.

Ameriprise Financial Inc Valuation – January 2019 $AMP

Company Profile (excerpt from Reuters): Comcast Corporation, incorporated on December 7, 2001, is a media and technology company. The Company has two primary businesses: Comcast Cable and NBCUniversal. The Company’s Comcast Cable business operates in the Cable Communications segment. Its NBCUniversal business operates in four business segments: Cable Networks, Broadcast Television, Filmed Entertainment and Theme Parks (collectively, the NBCUniversal segments). Its other business interests consist primarily of Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania and operates arena management-related businesses.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of AMP – 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 $15,808,544,980 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 166.04% Pass
5. Moderate PEmg Ratio PEmg < 20 10.96 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.96 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 $10.35
MG Growth Estimate 9.69%
MG Value $288.60
Opinion Undervalued
MG Grade B+
MG Value based on 3% Growth $150.12
MG Value based on 0% Growth $88.00
Market Implied Growth Rate 1.23%
Current Price $113.44
% of Intrinsic Value 39.31%

Ameriprise 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 $6.29 in 2014 to an estimated $10.35 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.23% 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 above the price.

At the time of valuation, further research into Ameriprise Financial, Inc. revealed the company was trading above its Graham Number of $112.58. The company pays a dividend of $3.24 per share, for a yield of 2.9%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 10.96, 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.

Ameriprise Financial, Inc. performs fairly well in the ModernGraham grading system, scoring a B+.

Stage 3: Information for Further Research

Graham Number $112.58
PEmg 10.96
PB Ratio 2.96
Dividend Yield 2.86%
TTM Dividend $3.24
Number of Consecutive Years of Dividend Growth 13

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 $4,240,000,000
Total Assets $145,191,000,000
Intangible Assets $0
Total Liabilities $139,573,000,000
Shares Outstanding (Diluted Average) 146,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $13.77
Dec2017 $9.44
Dec2016 $7.81
Dec2015 $8.48
Dec2014 $8.30
Dec2013 $6.44
Dec2012 $4.62
Dec2011 $4.53
Dec2010 $4.18
Dec2009 $2.95
Dec2008 -$0.16
Dec2007 $3.39
Dec2006 $2.54
Dec2005 $2.32
Dec2004 $3.22
Dec2003 $2.95

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $10.35
Dec2017 $8.46
Dec2016 $7.69
Dec2015 $7.25
Dec2014 $6.29
Dec2013 $5.04
Dec2012 $3.97
Dec2011 $3.42
Dec2010 $2.77
Dec2009 $2.11
Dec2008 $1.88
Dec2007 $2.90
Dec2006 $2.50
Dec2005 $2.22
Dec2004 $1.86
Dec2003 $0.98

Recommended Reading:

Other ModernGraham posts about the company

5 Undervalued Stocks for Value Investors with a High Beta – July 2018
10 Best Dividend Paying Stocks for the Enterprising Investor – May 2018
10 Undervalued Stocks for the Enterprising Investor – April 2018
Ameriprise Financial Inc Valuation – March 2018 $AMP
10 Companies Benjamin Graham Would Invest In Today – June 2016

Other ModernGraham posts about related companies

Invesco Ltd Valuation – January 2019 $IVZ
Capital One Financial Corp Valuation – January 2019 $COF
Total System Services Inc Valuation – December 2018 $TSS
Goldman Sachs Group Inc Valuation – November 2018 $GS
KKR & Co Inc Valuation – September 2018 $KKR
CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX

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.

Invesco Ltd Valuation – January 2019 $IVZ

Company Profile (excerpt from Reuters): Invesco Ltd. (Invesco), incorporated on September 12, 2007, is an independent investment management company. The Company provides a range of investment capabilities and outcomes, which are delivered through a set of investment vehicles, to help clients achieve their investment objectives. The Company has a presence in the retail and institutional markets within the investment management industry in North America; Europe, Middle East and Africa (EMEA), and Asia-Pacific. It served clients in more than 100 countries, as of December 31, 2016. The Company’s Jemstep solution provides wealth management home offices and their advisors with a suite of technology solutions that are customizable and are integrated into existing systems. The solution offers advisors an open architecture platform that includes Invesco’s fundamental and factor-based investment strategies.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of IVZ – 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 $7,099,659,454 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 115.57% Pass
5. Moderate PEmg Ratio PEmg < 20 7.21 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.77 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 $2.39
MG Growth Estimate 3.99%
MG Value $39.47
Opinion Undervalued
MG Grade A
MG Value based on 3% Growth $34.72
MG Value based on 0% Growth $20.35
Market Implied Growth Rate -0.65%
Current Price $17.26
% of Intrinsic Value 43.73%

Invesco Ltd. 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 $1.89 in 2014 to an estimated $2.39 for 2018. This level of demonstrated earnings growth outpaces the market’s implied estimate of 0.65% 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 Invesco Ltd. revealed the company was trading below its Graham Number of $33.89. The company pays a dividend of $1.15 per share, for a yield of 6.7%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 7.21, 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.

Invesco Ltd. fares extremely well in the ModernGraham grading system, scoring an A.

Stage 3: Information for Further Research

Graham Number $33.89
PEmg 7.21
PB Ratio 0.77
Dividend Yield 6.66%
TTM Dividend $1.15
Number of Consecutive Years of Dividend Growth 8

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 $7,635,100,000
Total Assets $32,503,800,000
Intangible Assets $9,468,000,000
Total Liabilities $23,185,000,000
Shares Outstanding (Diluted Average) 414,400,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.39
Dec2017 $2.75
Dec2016 $2.06
Dec2015 $2.26
Dec2014 $2.27
Dec2013 $2.10
Dec2012 $1.49
Dec2011 $1.57
Dec2010 $1.01
Dec2009 $0.76
Dec2008 $1.21
Dec2007 $1.64
Dec2006 $1.19
Dec2005 $0.54
Dec2004 -$0.10
Dec2003 $0.61
Dec2002 $0.03
Dec2001 $0.28
Dec2000 $0.63
Dec1999 $0.44
Dec1998 $0.10

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.39
Dec2017 $2.36
Dec2016 $2.12
Dec2015 $2.08
Dec2014 $1.89
Dec2013 $1.60
Dec2012 $1.30
Dec2011 $1.22
Dec2010 $1.08
Dec2009 $1.10
Dec2008 $1.14
Dec2007 $1.00
Dec2006 $0.60
Dec2005 $0.30
Dec2004 $0.21
Dec2003 $0.38
Dec2002 $0.27

Recommended Reading:

Other ModernGraham posts about the company

5 Low P/E Companies In The S&P 500 – August 2018
Best Stocks Below Their Graham Number – August 2018
10 Low PE Stock Picks for the Defensive Investor – August 2018
10 Undervalued Companies for the Defensive Dividend Stock Investor – July 2018
Best Stocks Below Their Graham Number – June 2018

Other ModernGraham posts about related companies

Total System Services Inc Valuation – December 2018 $TSS
Goldman Sachs Group Inc Valuation – November 2018 $GS
KKR & Co Inc Valuation – September 2018 $KKR
CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX
INTL FCStone Inc Valuation – July 2018 $INTL
SEI Investments Co Valuation – July 2018 $SEIC

Disclaimer:

The author held a long position in IVZ 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.

Capital One Financial Corp Valuation – January 2019 $COF

Company Profile (excerpt from Reuters): Capital One Financial Corporation, incorporated on July 21, 1994, is a diversified financial services holding company. The Company, along with its subsidiaries, offers a range of financial products and services to consumers, small businesses and commercial clients through branches, the Internet and other distribution channels. The Company’s segments include Credit Card, Consumer Banking, Commercial Banking and Other. The Credit Card segment consists of its domestic consumer and small business card lending, and the international card lending businesses in Canada and the United Kingdom. The Consumer Banking segment consists of its branch-based lending and deposit gathering activities for consumers and small businesses, national deposit gathering, national auto lending and consumer home loan lending and servicing activities. The Commercial Banking consists of its lending, deposit gathering and treasury management services to commercial real estate, and commercial and industrial customers. The Other segment includes management of its corporate investment portfolio and asset/liability management.

Downloadable PDF version of this valuation:

ModernGraham Valuation of COF – 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 $37,997,751,087 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 61.62% Pass
5. Moderate PEmg Ratio PEmg < 20 10.41 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.75 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 $7.60
MG Growth Estimate 1.52%
MG Value $87.73
Opinion Fairly Valued
MG Grade A-
MG Value based on 3% Growth $110.16
MG Value based on 0% Growth $64.58
Market Implied Growth Rate 0.95%
Current Price $78.94
% of Intrinsic Value 89.98%

Capital One Financial Corp. 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 Fairly Valued after growing its EPSmg (normalized earnings) from $6.9 in 2014 to an estimated $7.6 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 0.95% 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 Capital One Financial Corp. revealed the company was trading below its Graham Number of $161.29. The company pays a dividend of $1.6 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 10.39, 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.

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

Stage 3: Information for Further Research

Graham Number $161.29
PEmg 10.39
PB Ratio 0.75
Dividend Yield 2.03%
TTM Dividend $1.60
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 $51,821,000,000
Total Assets $362,909,000,000
Intangible Assets $14,513,000,000
Total Liabilities $312,271,000,000
Shares Outstanding (Diluted Average) 480,900,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $11.52
Dec2017 $3.49
Dec2016 $6.89
Dec2015 $7.07
Dec2014 $7.59
Dec2013 $6.89
Dec2012 $6.11
Dec2011 $6.80
Dec2010 $6.01
Dec2009 $0.74
Dec2008 -$0.21
Dec2007 $3.97
Dec2006 $7.62
Dec2005 $6.73
Dec2004 $6.21
Dec2003 $4.85
Dec2002 $3.93
Dec2001 $2.91
Dec2000 $2.24
Dec1999 $1.72
Dec1998 $1.32

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.60
Dec2017 $5.89
Dec2016 $7.03
Dec2015 $7.03
Dec2014 $6.90
Dec2013 $6.14
Dec2012 $5.14
Dec2011 $4.25
Dec2010 $3.20
Dec2009 $2.45
Dec2008 $3.82
Dec2007 $5.85
Dec2006 $6.49
Dec2005 $5.59
Dec2004 $4.69
Dec2003 $3.66
Dec2002 $2.85

Recommended Reading:

Other ModernGraham posts about the company

Capital One Financial Corp Valuation – March 2018 $COF
Benjamin Graham Would Love These 10 Companies Today
9 Best Stocks For Value Investors This Week – 7/8/16
Best Stocks Below Their Graham Number – August 2017
Best Stocks Below Their Graham Number – January 2017

Other ModernGraham posts about related companies

Total System Services Inc Valuation – December 2018 $TSS
Goldman Sachs Group Inc Valuation – November 2018 $GS
KKR & Co Inc Valuation – September 2018 $KKR
CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX
INTL FCStone Inc Valuation – July 2018 $INTL
SEI Investments Co Valuation – July 2018 $SEIC

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.

Total System Services Inc Valuation – December 2018 $TSS

Company Profile (excerpt from Reuters): Total System Services, Inc. (TSYS), incorporated on December 22, 1982, is a payment solutions provider that provides payment processing services, merchant services and related payment services to financial and non-financial institutions. The Company’s segments include North America Services, Merchant Services, NetSpend and International Services. In addition, it provides general purpose reloadable (GPR) prepaid and payroll cards, and alternative financial service solutions to the underbanked and other consumers. The Company’s Merchant Services segment provides third party processing services to merchant acquirers and Independent Sales Organizations (ISOs) and financial institutions. The Company’s NetSpend segment is engaged in the provision and sale of prepaid access devices, such as its GPR prepaid debit cards.

TSS Chart

TSS data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of TSS – December 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 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $16,044,737,508 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.57 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 157.28% Pass
6. Moderate PEmg Ratio PEmg < 20 31.74 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 5.98 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.57 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 5.24 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $2.71
MG Growth Estimate 14.10%
MG Value $99.33
Opinion Fairly Valued
MG Grade C
MG Value based on 3% Growth $39.24
MG Value based on 0% Growth $23.00
Market Implied Growth Rate 11.62%
Current Price $85.89
% of Intrinsic Value 86.47%

Total System Services, Inc. is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the high PEmg and PB ratios. 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 Fairly Valued after growing its EPSmg (normalized earnings) from $1.39 in 2014 to an estimated $2.71 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 11.62% 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 within a margin of safety relative to the price.

At the time of valuation, further research into Total System Services, Inc. revealed the company was trading above its Graham Number of $30.87. The company pays a dividend of $0.46 per share, for a yield of 0.5% Its PEmg (price over earnings per share – ModernGraham) was 31.74, which was above the industry average of 20.05. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-19.76.

Total System Services, Inc. receives an average overall rating in the ModernGraham grading system, scoring a C.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$19.76
Graham Number $30.87
PEmg 31.74
Current Ratio 2.57
PB Ratio 5.98
Current Dividend $0.46
Dividend Yield 0.54%
Number of Consecutive Years of Dividend Growth 1

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
Total Current Assets $1,199,917,000
Total Current Liabilities $467,171,000
Long-Term Debt $3,837,659,000
Total Assets $7,473,044,000
Intangible Assets $5,410,100,000
Total Liabilities $4,832,862,000
Shares Outstanding (Diluted Average) 183,846,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.42
Dec2017 $3.16
Dec2016 $1.73
Dec2015 $1.97
Dec2014 $1.72
Dec2013 $1.29
Dec2012 $1.29
Dec2011 $1.15
Dec2010 $0.99
Dec2009 $1.09
Dec2008 $1.26
Dec2007 $1.20
Dec2006 $1.26
Dec2005 $0.99
Dec2004 $0.76
Dec2003 $0.71
Dec2002 $0.64
Dec2001 $0.53
Dec2000 $0.45
Dec1999 $0.35
Dec1998 $0.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $2.71
Dec2017 $2.22
Dec2016 $1.70
Dec2015 $1.62
Dec2014 $1.39
Dec2013 $1.21
Dec2012 $1.16
Dec2011 $1.11
Dec2010 $1.12
Dec2009 $1.17
Dec2008 $1.17
Dec2007 $1.08
Dec2006 $0.97
Dec2005 $0.80
Dec2004 $0.67
Dec2003 $0.60
Dec2002 $0.51

Recommended Reading:

Other ModernGraham posts about the company

Total System Services Inc Valuation – February 2018 $TSS
10 Best Stocks For Value Investors This Week – 5/21/16
Total System Services Inc Valuation – May 2016 $TSS
Total System Services Inc. Valuation – November 2015 Update $TSS
Total System Services Inc. Analysis – August 2015 Update $TSS

Other ModernGraham posts about related companies

Goldman Sachs Group Inc Valuation – November 2018 $GS
KKR & Co Inc Valuation – September 2018 $KKR
CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX
INTL FCStone Inc Valuation – July 2018 $INTL
SEI Investments Co Valuation – July 2018 $SEIC
Canadian General Investments Ltd Valuation – July 2018 $TSE-CGI

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.

Goldman Sachs Group Inc Valuation – November 2018 $GS

Company Profile (excerpt from Reuters): The Goldman Sachs Group, Inc., incorporated on July 21, 1998, is an investment banking, securities and investment management company that provides a range of financial services to corporations, financial institutions, governments and individuals. The Company operates in four business segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. As of December 2016, it had offices in over 30 countries.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of GS – 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 $75,183,330,715 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 26.44% Fail
5. Moderate PEmg Ratio PEmg < 20 12.05 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.91 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 $16.77
MG Growth Estimate 2.81%
MG Value $236.89
Opinion Fairly Valued
MG Grade B
MG Value based on 3% Growth $243.13
MG Value based on 0% Growth $142.52
Market Implied Growth Rate 1.78%
Current Price $202.12
% of Intrinsic Value 85.32%

Goldman Sachs Group Inc is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the insufficient earnings 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 $14.12 in 2014 to an estimated $16.77 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 1.78% 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 Goldman Sachs Group Inc revealed the company was trading below its Graham Number of $325.35. The company pays a dividend of $2.9 per share, for a yield of 1.4% Its PEmg (price over earnings per share – ModernGraham) was 12.05, which was below the industry average of 20.05, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

Goldman Sachs Group Inc performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Graham Number $325.35
PEmg 12.05
PB Ratio 0.91
Dividend Yield 1.43%
TTM Dividend $2.90
Number of Consecutive Years of Dividend Growth 6

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 $255,886,000,000
Total Assets $957,190,000,000
Intangible Assets $4,101,000,000
Total Liabilities $870,428,000,000
Shares Outstanding (Diluted Average) 390,500,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $25.05
Dec2017 $9.01
Dec2016 $16.29
Dec2015 $12.14
Dec2014 $17.07
Dec2013 $15.46
Dec2012 $14.13
Dec2011 $4.51
Dec2010 $13.18
Dec2009 $22.13
Nov2008 $4.47
Nov2007 $24.73
Nov2006 $19.69
Nov2005 $11.21
Nov2004 $8.92
Nov2003 $5.87
Nov2002 $4.03
Nov2001 $4.26
Nov2000 $6.00
Nov1999 $5.57

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $16.77
Dec2017 $13.08
Dec2016 $15.08
Dec2015 $13.88
Dec2014 $14.12
Dec2013 $13.06
Dec2012 $11.80
Dec2011 $11.69
Dec2010 $15.80
Dec2009 $16.89
Nov2008 $14.11
Nov2007 $17.32
Nov2006 $12.39
Nov2005 $8.11
Nov2004 $6.31
Nov2003 $5.05
Nov2002 $4.42

Recommended Reading:

Other ModernGraham posts about the company

Goldman Sachs Group Inc Valuation – February 2018 $GS
Goldman Sachs Group Inc Valuation – June 2016 $GS
10 Low PE Stocks for the Enterprising Investor – June 2016
Stocks Trading Below Their Graham Number – May 2016
Stocks Trading Below Their Graham Number – March 2016

Other ModernGraham posts about related companies

KKR & Co Inc Valuation – September 2018 $KKR
CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX
INTL FCStone Inc Valuation – July 2018 $INTL
SEI Investments Co Valuation – July 2018 $SEIC
Canadian General Investments Ltd Valuation – July 2018 $TSE-CGI
SLM Corp Valuation – July 2018 $SLM

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.

KKR & Co Inc Valuation – September 2018 $KKR

Company Profile (excerpt from Reuters): KKR & Co. Inc., incorporated on June 25, 2007, is a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds. The Company’s business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. Through KKR’s Private Markets segment, KKR manages and sponsors a group of private equity funds and co-investment vehicles. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of KKR – 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 $21,840,989,154 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 195.09% Pass
5. Moderate PEmg Ratio PEmg < 20 16.23 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 0.61 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 $1.61
MG Growth Estimate 0.54%
MG Value $15.38
Opinion Overvalued
MG Grade B
MG Value based on 3% Growth $23.30
MG Value based on 0% Growth $13.66
Market Implied Growth Rate 3.87%
Current Price $26.08
% of Intrinsic Value 169.62%

KKR & Co Inc Class A 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 Overvalued after growing its EPSmg (normalized earnings) from $1.55 in 2014 to an estimated $1.61 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 3.87% 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 KKR & Co Inc Class A revealed the company was trading below its Graham Number of $27.48. The company pays a dividend of $0.67 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 16.23, which was below the industry average of 21.31, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

KKR & Co Inc Class A performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Graham Number $27.48
PEmg 16.23
PB Ratio 0.61
Dividend Yield 2.57%
TTM Dividend $0.67
Number of Consecutive Years of Dividend Growth 1

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 $19,972,383,000
Total Assets $48,572,664,000
Intangible Assets $94,899,000
Total Liabilities $25,247,621,000
Shares Outstanding (Diluted Average) 548,745,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.27
Dec2017 $1.95
Dec2016 $0.59
Dec2015 $1.01
Dec2014 $1.16
Dec2013 $2.30
Dec2012 $2.21
Dec2011 $0.01
Dec2010 $1.62

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.61
Dec2017 $1.32
Dec2016 $1.15
Dec2015 $1.40
Dec2014 $1.55
Dec2013 $1.57
Dec2012 $1.06
Dec2011 $0.44
Dec2010 $0.54

Recommended Reading:

Other ModernGraham posts about the company

KKR & Co Ltd Valuation – March 2017 $KKR
KKR & Co L.P. Valuation – August 2016 $KKR
10 Best Dividend Paying Stocks for the Enterprising Investor – August 2016
Dividend Investors Should Research These 10 Stocks – July 2016
10 Most Undervalued Companies for the Enterprising Investor – June 2016

Other ModernGraham posts about related companies

CorVel Corp Valuation – August 2018 $CRVL
Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX
INTL FCStone Inc Valuation – July 2018 $INTL
SEI Investments Co Valuation – July 2018 $SEIC
Canadian General Investments Ltd Valuation – July 2018 $TSE-CGI
SLM Corp Valuation – July 2018 $SLM
IGM Financial Inc Valuation – July 2018 $TSE-IGM

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.

CorVel Corp Valuation – August 2018 $CRVL

Company Profile (excerpt from Reuters): CorVel Corporation (Corvel), incorporated on May 16, 1991, is a provider of workers’ compensation solutions for employers, third party administrators, insurance companies and government agencies. The Company offers its services as a bundled solution, which includes claims management, as a standalone service, or as add-on services to existing customers. CareMC is an application platform for all of the Company’s primary service lines and delivers immediate access to customers. CareMC offers customers direct access to the Company’s primary services. CareMC allows for electronic communication and reporting between providers, payers, employers and patients. The Company offers services in two general categories, network solutions and patient management.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of CRVL – 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 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $1,177,565,744 Fail
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.75 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 69.01% Pass
6. Moderate PEmg Ratio PEmg < 20 34.11 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.29 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.75 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 0.00 Pass
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Fail
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $1.76
MG Growth Estimate 4.59%
MG Value $31.06
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $25.46
MG Value based on 0% Growth $14.93
Market Implied Growth Rate 12.81%
Current Price $59.90
% of Intrinsic Value 192.87%

CorVel Corporation is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the small size, low current ratio, poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the lack of dividends. 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 $1.34 in 2015 to an estimated $1.76 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 12.81% 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 below the price.

At the time of valuation, further research into CorVel Corporation revealed the company was trading above its Graham Number of $20.28. The company does not pay a dividend. Its PEmg (price over earnings per share – ModernGraham) was 34.11, which was above the industry average of 21.12. Finally, the company was trading above its Net Current Asset Value (NCAV) of $3.86.

CorVel Corporation receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) $3.86
Graham Number $20.28
PEmg 34.11
Current Ratio 1.75
PB Ratio 6.29
Current Dividend $0.00
Dividend Yield 0.00%
Number of Consecutive Years of Dividend Growth 0

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
Total Current Assets $183,156,000
Total Current Liabilities $104,801,000
Long-Term Debt $0
Total Assets $291,210,000
Intangible Assets $40,120,000
Total Liabilities $109,345,000
Shares Outstanding (Diluted Average) 19,102,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $2.02
Mar2018 $1.87
Mar2017 $1.51
Mar2016 $1.43
Mar2015 $1.37
Mar2014 $1.61
Mar2013 $1.19
Mar2012 $1.14
Mar2011 $1.03
Mar2010 $1.03
Mar2009 $0.71
Mar2008 $0.84
Mar2007 $0.65
Mar2006 $0.34
Mar2005 $0.32
Mar2004 $0.49
Mar2003 $0.50
Mar2002 $0.43
Mar2001 $0.38
Mar2000 $0.33
Mar1999 $0.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $1.76
Mar2018 $1.60
Mar2017 $1.45
Mar2016 $1.40
Mar2015 $1.34
Mar2014 $1.29
Mar2013 $1.09
Mar2012 $1.01
Mar2011 $0.91
Mar2010 $0.81
Mar2009 $0.66
Mar2008 $0.59
Mar2007 $0.47
Mar2006 $0.39
Mar2005 $0.42
Mar2004 $0.46
Mar2003 $0.42

Recommended Reading:

Other ModernGraham posts about the company

CorVel Corp Valuation – Initial Coverage $CRVL

Other ModernGraham posts about related companies

Jones Lang LaSalle Inc Valuation – August 2018 $JLL
Investment Technology Group Inc Valuation – July 2018 $ITG
Stifel Financial Corp Valuation – July 2018 $SF
CI Financial Corp Valuation – July 2018 $TSE:CIX
INTL FCStone Inc Valuation – July 2018 $INTL
SEI Investments Co Valuation – July 2018 $SEIC
Canadian General Investments Ltd Valuation – July 2018 $TSE-CGI
SLM Corp Valuation – July 2018 $SLM
IGM Financial Inc Valuation – July 2018 $TSE-IGM
Main Street Capital Corp Valuation – July 2018 $MAIN

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.

Jones Lang LaSalle Inc Valuation – August 2018 $JLL

Company Profile (excerpt from Reuters): Jones Lang LaSalle Incorporated (JLL), incorporated on April 15, 1997, is a financial and professional services company specializing in real estate. The Company operates through four business segments: Americas; Europe, Middle East and Africa (EMEA); Asia Pacific, and LaSalle. The Company offers integrated services on a local, regional and global basis to owner, occupier, investor and developer clients seeking increased value by owning, occupying, or investing in real estate. As of December 31, 2016, it had more than 280 corporate offices around the world from which it provided services to clients in more than 80 countries. It delivers a range of real estate services (RES) across three geographic business segments: the Americas, EMEA and Asia Pacific. Its real estate services include agency leasing, capital markets, corporate finance, energy and sustainability services, investment management, lease administration, logistics and supply-chain management, mortgage origination and servicing, real estate investment banking/merchant banking, tenant representation, transaction management, and value recovery and receivership services. It also offers services locally, regionally and globally to real estate owners, occupiers, investors and developers for various property types, including critical environments and data centers, cultural facilities, educational facilities, government facilities, infrastructure projects, military housing, office properties and sports facilities.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of JLL – 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 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $7,698,980,327 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.14 Fail
3. Earnings Stability Positive EPS for 10 years prior Fail
4. Dividend Record Dividend Payments for 10 years prior Pass
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 215.13% Pass
6. Moderate PEmg Ratio PEmg < 20 21.11 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 2.22 Pass
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.14 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 1.84 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $7.98
MG Growth Estimate 4.67%
MG Value $142.37
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $115.72
MG Value based on 0% Growth $67.84
Market Implied Growth Rate 6.30%
Current Price $168.45
% of Intrinsic Value 118.32%

Jones Lang LaSalle Inc does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, insufficient earnings stability over the last ten years, and the high PEmg ratio. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. 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 $6.09 in 2014 to an estimated $7.98 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 6.3% 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 below the price.

At the time of valuation, further research into Jones Lang LaSalle Inc revealed the company was trading above its Graham Number of $125.23. The company pays a dividend of $0.72 per share, for a yield of 0.4% Its PEmg (price over earnings per share – ModernGraham) was 21.11, which was below the industry average of 21.12, 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 $-29.17.

Jones Lang LaSalle Inc scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$29.17
Graham Number $125.23
PEmg 21.11
Current Ratio 1.14
PB Ratio 2.22
Current Dividend $0.72
Dividend Yield 0.43%
Number of Consecutive Years of Dividend Growth 7

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Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $4,389,500,000
Total Current Liabilities $3,838,300,000
Long-Term Debt $1,012,800,000
Total Assets $9,204,200,000
Intangible Assets $3,046,300,000
Total Liabilities $5,728,500,000
Shares Outstanding (Diluted Average) 45,905,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $9.75
Dec2017 $5.55
Dec2016 $6.98
Dec2015 $9.65
Dec2014 $8.52
Dec2013 $5.98
Dec2012 $4.63
Dec2011 $3.70
Dec2010 $3.48
Dec2009 -$0.11
Dec2008 $2.44
Dec2007 $7.64
Dec2006 $5.24
Dec2005 $3.12
Dec2004 $1.96
Dec2003 $1.12
Dec2002 $0.85
Dec2001 -$0.51
Dec2000 -$2.30
Dec1999 -$4.20
Dec1998 $1.25

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $7.98
Dec2017 $7.18
Dec2016 $7.71
Dec2015 $7.55
Dec2014 $6.09
Dec2013 $4.42
Dec2012 $3.37
Dec2011 $2.97
Dec2010 $2.99
Dec2009 $3.05
Dec2008 $4.45
Dec2007 $4.90
Dec2006 $3.18
Dec2005 $1.87
Dec2004 $0.90
Dec2003 -$0.09
Dec2002 -$0.79

Recommended Reading:

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Jones Lang LaSalle Inc Valuation – Initial Coverage $JLL

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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.

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