US Bancorp Valuation – March 2019 #USB

Company Profile (excerpt from Reuters): U.S. Bancorp, incorporated on April 2, 1929, is a multi-state financial services holding company. The Company provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machine (ATM) processing, mortgage banking, insurance, brokerage and leasing. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions.

USB Chart

USB data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of USB – 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 $81,855,808,103 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 69.13% Pass
5. Moderate PEmg Ratio PEmg < 20 13.24 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.60 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 $3.86
MG Growth Estimate 4.20%
MG Value $65.26
Opinion Fairly Valued
MG Grade A-
MG Value based on 3% Growth $56.00
MG Value based on 0% Growth $32.83
Market Implied Growth Rate 2.37%
Current Price $51.14
% of Intrinsic Value 78.36%

U.S. Bancorp 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 $3.02 in 2015 to an estimated $3.86 for 2019. This level of demonstrated earnings growth supports the market’s implied estimate of 2.37% 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 U.S. Bancorp revealed the company was trading below its Graham Number of $51.57. The company pays a dividend of $1.34 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 13.24, 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.

U.S. Bancorp fares extremely well in the ModernGraham grading system, scoring an A-.

Stage 3: Information for Further Research

Graham Number $51.57
PEmg 13.24
PB Ratio 1.60
Dividend Yield 2.62%
TTM Dividend $1.34
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 12/1/2018
Long-Term Debt & Capital Lease Obligation $41,340,000,000
Total Assets $467,374,000,000
Intangible Assets $12,761,000,000
Total Liabilities $415,717,000,000
Shares Outstanding (Diluted Average) 1,617,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $4.24
Dec2018 $4.14
Dec2017 $3.51
Dec2016 $3.24
Dec2015 $3.16
Dec2014 $3.08
Dec2013 $3.00
Dec2012 $2.84
Dec2011 $2.46
Dec2010 $1.73
Dec2009 $0.97
Dec2008 $1.61
Dec2007 $2.43
Dec2006 $2.61
Dec2005 $2.42
Dec2004 $2.18
Dec2003 $1.93
Dec2002 $1.65
Dec2001 $0.88
Dec2000 $1.50
Dec1999 $2.06

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.86
Dec2018 $3.59
Dec2017 $3.28
Dec2016 $3.13
Dec2015 $3.02
Dec2014 $2.84
Dec2013 $2.54
Dec2012 $2.19
Dec2011 $1.85
Dec2010 $1.66
Dec2009 $1.75
Dec2008 $2.17
Dec2007 $2.41
Dec2006 $2.32
Dec2005 $2.05
Dec2004 $1.79
Dec2003 $1.60

Recommended Reading:

Other ModernGraham posts about the company

US Bancorp Valuation – May 2018 $USB
12 Best Stocks for Value Investors This Week – 2/4/17
U.S. Bancorp Valuation – February 2017 $USB
15 Best Undervalued Stocks of the Week – 8/20/16
US Bancorp Valuation – August 2016 $USB

Other ModernGraham posts about related companies

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
PNC Financial Services Group Inc Valuation – January 2019 $PNC
KeyCorp Valuation – January 2019 $KEY

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.

US Bancorp Valuation – May 2018 $USB

Company Profile (excerpt from Reuters): U.S. Bancorp, incorporated on April 2, 1929, is a multi-state financial services holding company. The Company provides a full range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machine (ATM) processing, mortgage banking, insurance, brokerage and leasing. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business, principally in domestic markets. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions.

USB Chart

USB data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of USB – May 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 $83,522,451,199 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 107.56% Pass
5. Moderate PEmg Ratio PEmg < 20 14.50 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.72 Pass
Enterprising Investor; must pass all 3 of the following tests, or be suitable for the Defensive Investor.
1. Earnings Stability Positive EPS for 5 years prior Pass
2. Dividend Record Currently Pays Dividend Pass
3. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $3.53
MG Growth Estimate 3.66%
MG Value $55.86
Opinion Fairly Valued
MG Grade B
MG Value based on 3% Growth $51.19
MG Value based on 0% Growth $30.01
Market Implied Growth Rate 3.00%
Current Price $51.18
% of Intrinsic Value 91.62%

U.S. Bancorp 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 $2.84 in 2014 to an estimated $3.53 for 2018. This level of demonstrated earnings growth supports the market’s implied estimate of 3% 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 U.S. Bancorp revealed the company was trading above its Graham Number of $48.45. The company pays a dividend of $1.16 per share, for a yield of 2.3%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 14.5, which was below the industry average of 21.11, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

U.S. Bancorp performs fairly well in the ModernGraham grading system, scoring a B.

Stage 3: Information for Further Research

Graham Number $48.45
PEmg 14.50
PB Ratio 1.72
Dividend Yield 2.27%
TTM Dividend $1.16
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 3/1/2018
Long-Term Debt & Capital Lease Obligation $33,201,000,000
Total Assets $460,119,000,000
Intangible Assets $12,828,000,000
Total Liabilities $410,932,000,000
Shares Outstanding (Diluted Average) 1,657,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.96
Dec2017 $3.51
Dec2016 $3.24
Dec2015 $3.16
Dec2014 $3.08
Dec2013 $3.00
Dec2012 $2.84
Dec2011 $2.46
Dec2010 $1.73
Dec2009 $0.97
Dec2008 $1.61
Dec2007 $2.43
Dec2006 $2.61
Dec2005 $2.42
Dec2004 $2.18
Dec2003 $1.93
Dec2002 $1.65
Dec2001 $0.88
Dec2000 $1.50
Dec1999 $2.06
Dec1998 $1.78

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.53
Dec2017 $3.28
Dec2016 $3.13
Dec2015 $3.02
Dec2014 $2.84
Dec2013 $2.54
Dec2012 $2.19
Dec2011 $1.85
Dec2010 $1.66
Dec2009 $1.75
Dec2008 $2.17
Dec2007 $2.41
Dec2006 $2.32
Dec2005 $2.05
Dec2004 $1.79
Dec2003 $1.60
Dec2002 $1.48

Recommended Reading:

Other ModernGraham posts about the company

12 Best Stocks for Value Investors This Week – 2/4/17
U.S. Bancorp Valuation – February 2017 $USB
15 Best Undervalued Stocks of the Week – 8/20/16
US Bancorp Valuation – August 2016 $USB
Best Stocks to Invest In: the Bank Industry – August 2016

Other ModernGraham posts about related companies

Bank of New York Mellon Corp Valuation – May 2018 $BK
Citizens Financial Group Inc Valuation – April 2018 $CFG
BB&T Corporation Valuation – April 2018 $BBT
M&T Bank Corp Valuation – April 2018 $MTB
Bank of America Corp Valuation – March 2018 $BAC
Fifth Third Bancorp Valuation – March 2018 $FITB
Regions Financial Corp Valuation – March 2018 $RF
Huntington Bancshares Inc Valuation – March 2018 $HBAN
Zions Bancorp Valuation – March 2018 $ZION
State Street Corp Valuation – March 2018 $STT

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.

U.S. Bancorp Valuation – February 2017 $USB

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

Company Profile (obtained from Google Finance): U.S. Bancorp is a multi-state financial services holding company. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business in domestic markets. It provides a range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machines (ATMs) processing, mortgage banking, insurance, brokerage and leasing. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Its lending services include traditional credit products, as well as credit card services, leasing financing and import/export trade, asset-backed lending and agricultural finance. Its depository services include checking accounts, savings accounts and time certificate contracts.

USB Chart

USB data by YCharts

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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. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of USB – February 2017

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

What kind of Intelligent Investor are you?

Defensive Investor; must pass all 6 of the following tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $91,376,615,020 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 126.91% Pass
5. Moderate PEmg Ratio PEmg < 20 16.60 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.93 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 $3.23
MG Growth Estimate 4.06%
MG Value $53.73
Opinion Fairly Valued
MG Grade C+
MG Value based on 3% Growth $46.88
MG Value based on 0% Growth $27.48
Market Implied Growth Rate 4.05%
Current Price $53.66
% of Intrinsic Value 99.86%

U.S. Bancorp 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 $2.54 in 2013 to an estimated $3.23 for 2017. This level of demonstrated earnings growth supports the market’s implied estimate of 4.05% 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 U.S. Bancorp revealed the company was trading above its Graham Number of $43.28. The company pays a dividend of $1.07 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 16.6, which was below the industry average of 21.43, which by some methods of valuation makes it one of the most undervalued stocks in its industry.

U.S. Bancorp receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

Graham Number $43.28
PEmg 16.60
PB Ratio 1.93
Dividend Yield 1.99%
TTM Dividend $1.07
Number of Consecutive Years of Dividend Growth 7

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Useful Links:

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

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Long-Term Debt & Capital Lease Obligation $33,323,000,000
Total Assets $445,964,000,000
Intangible Assets $12,647,000,000
Total Liabilities $398,666,000,000
Shares Outstanding (Diluted Average) 1,705,000,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.38
Dec2016 $3.24
Dec2015 $3.16
Dec2014 $3.08
Dec2013 $3.00
Dec2012 $2.84
Dec2011 $2.46
Dec2010 $1.73
Dec2009 $0.97
Dec2008 $1.61
Dec2007 $2.43
Dec2006 $2.61
Dec2005 $2.42
Dec2004 $2.18
Dec2003 $1.93
Dec2002 $1.65
Dec2001 $0.88
Dec2000 $1.50
Dec1999 $2.06
Dec1998 $1.78
Dec1997 $1.11

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.23
Dec2016 $3.13
Dec2015 $3.02
Dec2014 $2.84
Dec2013 $2.54
Dec2012 $2.19
Dec2011 $1.85
Dec2010 $1.66
Dec2009 $1.75
Dec2008 $2.17
Dec2007 $2.41
Dec2006 $2.32
Dec2005 $2.05
Dec2004 $1.79
Dec2003 $1.60
Dec2002 $1.48
Dec2001 $1.42

Recommended Reading:

Other ModernGraham posts about the company

Best Stocks to Invest In: the Bank Industry – August 2016
5 Companies for the Defensive Investor Near 52 Week Lows – July 2016
15 Best Stocks For Value Investors This Week – 2/13/16
U.S. Bancorp Valuation – February 2016 $USB
12 Best Stocks For Value Investors This Week – 11/7/15

Other ModernGraham posts about related companies

Canadian Imperial Bank of Commerce Valuation – Initial Coverage $TSE:CM
SVB Financial Group Valuation – Initial Coverage $SIVB
Bank of New York Mellon Corp Valuation – January 2017 $BK
Simmons First National Corporation Valuation – Initial Coverage $SFNC
ServisFirst Bancshares Inc Valuation – Initial Coverage $SFBS
Ingredion Inc Valuation – Initial Coverage $INGR
City Holding Company Valuation – Initial Coverage $CHCO
Southside Bancshares Inc Valuation – Initial Coverage $SBSI
Independent Bank Corp Valuation – Initial Coverage $INDB
Cullen/Frost Bankers Inc Valuation – Initial Coverage $CFR

Disclaimer:

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

US Bancorp Valuation – August 2016 $USB

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 – July 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 U.S. Bancorp (USB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): U.S. Bancorp is a multi-state financial services holding company. The Company’s banking subsidiary, U.S. Bank National Association, is engaged in the general banking business in domestic markets. It provides a range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machines (ATMs) processing, mortgage banking, insurance, brokerage and leasing. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Its lending services include traditional credit products, as well as credit card services, leasing financing and import/export trade, asset-backed lending and agricultural finance. Its depository services include checking accounts, savings accounts and time certificate contracts.

USB Chart

USB data by YCharts

[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]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of USB – August 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 $74,060,969,549 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 88.02% Pass
5. Moderate PEmg Ratio PEmg < 20 13.84 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.57 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

USB value chart August 2016

EPSmg $3.11
MG Growth Estimate 6.33%
MG Value $65.78
Opinion Undervalued
MG Grade C+
MG Value based on 3% Growth $45.07
MG Value based on 0% Growth $26.42
Market Implied Growth Rate 2.67%
Current Price $43.02
% of Intrinsic Value 65.40%

U.S. Bancorp 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 $2.19 in 2012 to an estimated $3.11 for 2016. This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.67% 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 U.S. Bancorp revealed the company was trading above its Graham Number of $41.67. The company pays a dividend of $1.02 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 13.84, which was above the industry average of 13.43.

U.S. Bancorp receives an average overall rating in the ModernGraham grading system, scoring a C+.

Stage 3: Information for Further Research

USB charts August 2016

Graham Number $41.67
PEmg 13.84
PB Ratio 1.57
Dividend Yield 2.37%
TTM Dividend $1.02
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 6/1/2016
Long-Term Debt & Capital Lease Obligation $36,941,000,000
Total Assets $438,463,000,000
Intangible Assets $44,420,000,000
Total Liabilities $391,073,000,000
Shares Outstanding (Diluted Average) 1,731,000,000

Earnings Per Share History

Next Fiscal Year Estimate $3.18
Dec2015 $3.16
Dec2014 $3.08
Dec2013 $3.00
Dec2012 $2.84
Dec2011 $2.46
Dec2010 $1.73
Dec2009 $0.97
Dec2008 $1.61
Dec2007 $2.43
Dec2006 $2.61
Dec2005 $2.42
Dec2004 $2.18
Dec2003 $1.93
Dec2002 $1.65
Dec2001 $0.88
Dec2000 $1.50
Dec1999 $2.06
Dec1998 $1.78
Dec1997 $1.11
Dec1996 $1.57

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.11
Dec2015 $3.02
Dec2014 $2.84
Dec2013 $2.54
Dec2012 $2.19
Dec2011 $1.85
Dec2010 $1.66
Dec2009 $1.75
Dec2008 $2.17
Dec2007 $2.41
Dec2006 $2.32
Dec2005 $2.05
Dec2004 $1.79
Dec2003 $1.60
Dec2002 $1.48
Dec2001 $1.42
Dec2000 $1.66

Recommended Reading:

Other ModernGraham posts about the company

Best Stocks to Invest In: the Bank Industry – August 2016
5 Companies for the Defensive Investor Near 52 Week Lows – July 2016
15 Best Stocks For Value Investors This Week – 2/13/16
U.S. Bancorp Valuation – February 2016 $USB
12 Best Stocks For Value Investors This Week – 11/7/15

Other ModernGraham posts about related companies

Bank of New York Mellon Corp Valuation – August 2016 $BK
Best Stocks to Invest In: the Bank Industry – August 2016
JPMorgan Chase & Co Valuation – July 2016 $JPM
Dominion Resources Inc Valuation – July 2016 $D
M&T Bank Corp Valuation – July 2016 $MTB
Citigroup Inc Valuation – July 2016 $C
Bank of America Corp Valuation – July 2016 $BAC
Fifth Third Bancorp Valuation – July 2016 $FITB
Zions Bancorp Valuation – June 2016 $ZION
Regions Financial Corp – June 2016 $RF

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.

U.S. Bancorp Valuation – February 2016 $USB

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 – February 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 U.S. Bancorp (USB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): U.S. Bancorp is a multi-state financial services holding company. The Company operates through its banking subsidiary, U.S. Bank National Association, is engaged in the general banking business in domestic markets. The Company provides a range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machines (ATM) processing, mortgage banking, insurance, brokerage and leasing. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Its commercial and consumer lending services are offered to customers within the Company’s domestic markets, to domestic customers with foreign operations and to large national customers operating in specific industries targeted by the Company.

[level-free]

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Downloadable PDF version of this valuation:

ModernGraham Valuation of USB

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 $69,110,490,998 Pass
2. Earnings Stability Positive EPS for 10 years prior Pass
3. Dividend Record Dividend Payments for 10 years prior Pass
4. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 89.44% Pass
5. Moderate PEmg Ratio PEmg < 20 12.62 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.50 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

USB value chart February 2016

EPSmg $3.13
MG Growth Estimate 6.50%
MG Value $67.30
Opinion Undervalued
MG Value based on 3% Growth $45.41
MG Value based on 0% Growth $26.62
Market Implied Growth Rate 2.06%
Current Price $39.53
% of Intrinsic Value 58.74%

U.S. Bancorp qualifies for both the Enterprising Investor and the more conservative Defensive Investor.  In fact, the company passes all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position.  As a result, all value 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 $2.19 in 2011 to an estimated $3.13 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.06% 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.

Stage 3: Information for Further Research

USB charts February 2016

 

Graham Number $41.16
PEmg 12.62
PB Ratio 1.50
Dividend Yield 2.53%
Number of Consecutive Years of Dividend Growth 6

 

[/not-level-free]

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 Dec2015
Long-Term Debt $32,078,000,000
Total Assets $421,853,000,000
Intangible Assets $12,711,000,000
Total Liabilities $375,722,000,000
Shares Outstanding (Diluted Average) 1,753,590,000

Earnings Per Share History

Next Fiscal Year Estimate $3.25
Dec2015 $3.16
Dec2014 $3.08
Dec2013 $3.00
Dec2012 $2.84
Dec2011 $2.46
Dec2010 $1.73
Dec2009 $0.97
Dec2008 $1.61
Dec2007 $2.43
Dec2006 $2.61
Dec2005 $2.42
Dec2004 $2.18
Dec2003 $1.93
Dec2002 $1.65
Dec2001 $0.88
Dec2000 $1.50
Dec1999 $2.06
Dec1998 $1.78
Dec1997 $1.11
Dec1996 $1.57

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $3.13
Dec2015 $3.02
Dec2014 $2.84
Dec2013 $2.54
Dec2012 $2.19
Dec2011 $1.85
Dec2010 $1.66
Dec2009 $1.75
Dec2008 $2.17
Dec2007 $2.41
Dec2006 $2.32
Dec2005 $2.05
Dec2004 $1.79
Dec2003 $1.60
Dec2002 $1.48
Dec2001 $1.42
Dec2000 $1.66

Recommended Reading:

Other ModernGraham posts about the company

12 Best Stocks For Value Investors This Week – 11/7/15
The Best Companies of the Banking Industry – October 2015
The 8 Best Stocks For Value Investors This Week – 8/8/15
US Bancorp Analysis – August 2015 Update $USB
47 Companies in the Spotlight This Week – 5/16/15

Other ModernGraham posts about related companies

JP Morgan Chase Valuation – January 2016 Update $JPM
Bank of New York Mellon Valuation – January 2016 Update $BK
Fifth Third Bancorp Valuation – January 2016 Update $FITB
Huntington Bancshares Valuation – January 2016 Update $HBAN
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

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.

U.S. Bancorp Valuation – November 2015 Update $USB

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 – October 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 U.S. Bancorp (USB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): U.S. Bancorp is a multi-state financial services holding company. The Company operates through its banking subsidiary, U.S. Bank National Association, is engaged in the general banking business in domestic markets. The Company provides a range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machines (ATM) processing, mortgage banking, insurance, brokerage and leasing. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Its commercial and consumer lending services are offered to customers within the Company’s domestic markets, to domestic customers with foreign operations and to large national customers operating in specific industries targeted by the Company.

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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.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of USB – November 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 $74,913,149,494 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 37.74% Pass
5. Moderate PEmg Ratio PEmg < 20 14.23 Pass
6. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 1.70 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

USB value Chart November 2015

EPSmg $2.99
MG Growth Estimate 9.22%
MG Value $80.58
Opinion Undervalued
MG Value based on 3% Growth $43.36
MG Value based on 0% Growth $25.42
Market Implied Growth Rate 2.86%
Current Price $42.55
% of Intrinsic Value 52.80%

U.S. Bancorp qualifies for both the Enterprising Investor and the more conservative Defensive Investor.  The company passes all of the requirements of both investor types, a rare accomplishment indicative of the company’s strong financial position.  As a result, all value 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 $1.85 in 2011 to an estimated $2.99 for 2016.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 2.86% 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 U.S. Bancorp (USB)?  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

USB Charts November 2015

Graham Number $39.50
PEmg 14.23
PB Ratio 1.70
Dividend Yield 2.33%
Number of Consecutive Years of Dividend Growth 5

 

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

Useful Links:

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

Most Recent Balance Sheet Figures

Long-Term Debt $34,141,000,000
Total Assets $419,075,000,000
Intangible Assets $12,599,000,000
Total Liabilities $374,538,000,000
Shares Outstanding (Diluted Average) 1,779,000,000

Earnings Per Share History

Next Fiscal Year Estimate $3.08
Dec14 $3.08
Dec13 $3.00
Dec12 $2.84
Dec11 $2.46
Dec10 $1.73
Dec09 $0.97
Dec08 $1.61
Dec07 $2.43
Dec06 $2.61
Dec05 $2.42
Dec04 $2.18
Dec03 $1.93
Dec02 $1.65
Dec01 $0.88
Dec00 $1.50
Dec99 $2.06
Dec98 $1.78
Dec97 $1.11
Dec96 $1.57
Dec95 $0.47

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $2.99
Dec14 $2.84
Dec13 $2.54
Dec12 $2.19
Dec11 $1.85
Dec10 $1.66
Dec09 $1.75
Dec08 $2.17
Dec07 $2.41
Dec06 $2.32
Dec05 $2.05
Dec04 $1.79
Dec03 $1.60
Dec02 $1.48
Dec01 $1.42
Dec00 $1.66
Dec99 $1.62

Recommended Reading:

Other ModernGraham posts about the company

The Best Companies of the Banking Industry – October 2015
The 8 Best Stocks For Value Investors This Week – 8/8/15
US Bancorp Analysis – August 2015 Update $USB
47 Companies in the Spotlight This Week – 5/16/15
U.S. Bancorp Quarterly Valuation – May 2015 $USB

Other ModernGraham posts about related companies

Starwood Property Trust Inc. Valuation – October 2015 Update $STWD
The Best Companies of the Banking Industry – October 2015
Comerica Inc. Valuation – October 2015 Update $CMA
Bank of New York Mellon Corporation Analysis – October 2015 Update $BK
Fifth Third Bancorp Analysis – October 2015 Update $FITB
Huntington Bancshares Inc. Analysis – October 2015 Update $HBAN
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

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.

US Bancorp Analysis – August 2015 Update $USB

500px-U.S._Bancorp_logo.svgIn 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 US Bancorp (USB) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): U.S. Bancorp is a multi-state financial services holding company. The Company operates through its banking subsidiary, U.S. Bank National Association, is engaged in the general banking business in domestic markets. The Company provides a range of financial services, including lending and depository services, cash management, capital markets, and trust and investment management services. It also engages in credit card services, merchant and automated teller machines (ATM) processing, mortgage banking, insurance, brokerage and leasing. U.S. Bank National Association provides a range of products and services to individuals, businesses, institutional organizations, governmental entities and other financial institutions. Its commercial and consumer lending services are offered to customers within the Company’s domestic markets, to domestic customers with foreign operations and to large national customers operating in specific industries targeted by the Company.

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

  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 – PASS
  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 – PASS
  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 $45.24
MG Value $82.10
MG Opinion Undervalued
Value Based on 3% Growth $43.65
Value Based on 0% Growth $25.59
Market Implied Growth Rate 3.26%
PEmg 15.03
PB Ratio 1.81

Balance Sheet – June 2015

Total Debt $34,141,000,000
Total Assets $419,075,000,000
Intangible Assets $12,599,000,000
Total Liabilities $374,538,000,000
Outstanding Shares 1,779,000,000

Earnings Per Share

2015 (estimate) $3.14
2014 $3.08
2013 $3.00
2012 $2.84
2011 $2.46
2010 $1.73
2009 $0.97
2008 $1.61
2007 $2.43
2006 $2.61
2005 $2.42

Earnings Per Share – ModernGraham 

2015 (estimate) $3.01
2014 $2.84
2013 $2.54
2012 $2.19
2011 $1.85
2010 $1.66

Dividend History

Conclusion

US Bancorp qualifies for both the Defensive Investor and the Enterprising Investor.  Neither investor type has any initial concerns.  As a result, all value 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 $1.85 in 2011 to an estimated $3.01 for 2015.  This level of demonstrated growth is greater than the market’s implied estimate of 3.26% 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.

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 US Bancorp (USB)?  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 any of the 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.

U.S. Bancorp Quarterly Valuation – May 2015 $USB

500px-U.S._Bancorp_logo.svgU.S. Bancorp (NYSE:USB) presents an intriguing investment possibility for value investors, as the company has maintained very strong earnings growth over the last few years that may not be properly factored into the market price. Benjamin Graham, the father of value investing, taught that looking at the price cannot be the sole factor in investment decisions, as the most important aspect to consider is whether the company is trading at a discount relative to its intrinsic value. It is through a thorough fundamental analysis that the investor is able to make a determination about a potential investment’s merits. Here is a look at how U.S. Bancorp fares in the ModernGraham valuation model.

The model is inspired by the teachings of Benjamin Graham, and considers numerous metrics intended to help the investor reduce risk levels. The first part of the analysis is to determine whether the company is suitable for the very conservative Defensive Investor or the less conservative Enterprising Investor, who is willing to spend a greater amount of time conducting further research.

In addition, Graham strongly suggested that investors avoid speculation, in order to remove the subjective elements of emotion. This is best achieved by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another. By using theModernGraham method, one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

USB Chart

USB data by YCharts

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

  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 – PASS
  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 1/3rd over the last 10 years, using 3-year averages at the beginning and end of the period – PASS
  5. Moderate PEmg (price over normalized earnings) 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 that 5 years ago – PASS

Valuation Summary

Key Data

Recent Price $43.25
MG Value $82.35
MG Opinion Undervalued
Value Based on 3% Growth $43.70
Value Based on 0% Growth $25.62
Market Implied Growth Rate 2.92%
PEmg 14.35
PB Ratio 1.75

Balance Sheet – March 2015

Total Debt $35,104,000,000
Total Assets $410,233,000,000
Intangible Assets $12,396,000,000
Total Liabilities $365,956,000,000
Outstanding Shares 1,789,000,000

Earnings Per Share

2015 (estimate) $3.15
2014 $3.08
2013 $3.00
2012 $2.84
2011 $2.46
2010 $1.73
2009 $0.97
2008 $1.61
2007 $2.43
2006 $2.61
2005 $2.42

Earnings Per Share – ModernGraham

2015 (estimate) $3.01
2014 $2.84
2013 $2.54
2012 $2.19
2011 $1.85
2010 $1.66

Dividend History

USB Dividend Chart

USB Dividend data by YCharts

Conclusion

U.S. Bancorp passes all of the initial requirements of both the Defensive Investor and the Enterprising Investor, which is a rare accomplishment indicative of the company’s strong financials. As a result, all value 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, the company has grown its EPSmg (normalized earnings) from $1.85 in 2011 to an estimated $3.01 for 2015. This is a very strong level of demonstrated growth, which is well above the market’s implied estimate for earnings growth of only 2.92% over the next 7-10 years. The ModernGraham valuation model returns an estimate of intrinsic value falling above the current price, indicating that U.S. Bancorp is undervalued at the present time.

Disclaimer: The author did not hold a position in any of the companies listed in this article at the time of publication and had no intention of changing that position within the next 72 hours. Logos taken from either the company website or Wikipedia; this article is not affiliated with the companies in any manner.

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

U.S. Bancorp Quarterly Valuation – February 2015 $USB

500px-U.S._Bancorp_logo.svg

U.S. Bancorp passes the initial requirements of the Enterprising Investor, but not the more conservative Defensive Investor. The Defensive Investor is concerned by the insufficient earnings growth over the last ten years while the Enterprising Investor has no initial concerns. As a result, 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, the company has grown its EPSmg (normalized earnings) from $1.66 in 2010 to $2.84 for 2014. This is a very strong level of demonstrated growth, which is well above the market’s implied estimate for earnings growth of only 3.55% over the next 7-10 years. In fact, the historical growth is around 14.3% per year, so the market is expecting a very significant drop in earnings growth. The ModernGraham valuation model reduces the historical growth to a more conservative figure, assuming that some slowdown will occur, and therefore returns an estimate of intrinsic value falling above the current price, indicating the company is undervalued at the present time.

Be sure to check out previous ModernGraham valuations of U.S. Bancorp (USB) for greater perspective!

Read the full valuation on Seeking Alpha!

USB Chart

USB data by YCharts

Disclaimer:  The author did not hold a position in U.S. Bancorp (USB) 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.

U.S. Bancorp Quarterly Valuation – November 2014 $USB

500px-U.S._Bancorp_logo.svg

Enterprising Investors following the ModernGraham approach should keep a keen eye on U.S. Bancorp and pour some time into conducting further research. The Defensive Investor may not feel the same way, with concerns regarding the level of earnings growth over the last ten years. However, Enterprising Investors have no initial concerns, and should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

To determine an estimate of the intrinsic value, one must consider the company’s earnings. Here, the company has grown its EPSmg (normalized earnings) from $1.66 in 2010 to an estimated $2.82 for 2014. This is a high level of growth, approximately 14% each year. Even adjusting for a margin of safety to assume the company will not do as well in the future, a conservative growth estimate may be around 10.6%, which is well above the market’s implied forecast of only 3.43% earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model returns an estimate of intrinsic value well above the price, supporting a clear conclusion that the company is significantly undervalued. Enterprising Investors are therefore encouraged to proceed with further research to determine whether U.S. Bancorp is suitable for their own individual portfolios.

Be sure to check out previous ModernGraham valuations of U.S. Bancorp for better perspective.

Read the full valuation on Seeking Alpha!

USB Chart

USB data by YCharts

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