DCF Studio

    AIZ · NYQ · Financial Services

    Assurant, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 353.61

    Market price

    USD 282.23

    Implied upside

    +25.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    Wrong toolThis is a financial. Banks and insurers report no meaningful operating income, and capex and working capital do not mean what a free-cashflow model assumes, so a DCF will misprice it. The model below runs on best-effort numbers - treat it as an illustration, not a valuation.

    Value Per Share

    Perpetuity growth
    USD 353.61+25.3%
    Exit multiple
    USD 334.16+18.4%
    Market price
    USD 282.23

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueUSD 13.8bnUSD 14.9bnUSD 16.1bnUSD 17.4bnUSD 18.8bn+7.9%
    EBITUSD 932.6mUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bn+7.9%
    NOPATUSD 745.6mUSD 804.7mUSD 868.5mUSD 937.3mUSD 1.0bn+7.9%
    Add depreciation & amortisationUSD 255.3mUSD 275.5mUSD 297.3mUSD 320.9mUSD 346.3m+7.9%
    Less capital expenditureUSD -254.1mUSD -274.2mUSD -295.9mUSD -319.4mUSD -344.7m+7.9%
    Less increase in working capitalUSD 282.5mUSD 304.9mUSD 329.0mUSD 355.1mUSD 383.3m-7.9%
    Free cashflow to firmUSD 1.0bnUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.4bn+7.9%
    Discount factor0.96150.88890.82180.75980.7025-
    Present valueUSD 989.7mUSD 987.5mUSD 985.3mUSD 983.2mUSD 981.0m-0.2%
    Present Value Of The ForecastUSD 4.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.00%US 10-year Treasury (^TNX)
    Equity risk premium5.50%Market assumption
    Beta0.693Reported 0.542, pulled toward 1.0 (Blume)
    Cost of equity8.81%Risk-free + beta x equity risk premium
    Cost of debt5.11%Interest expense / average total debt
    Market capitalisationUSD 13.9bn86.3% of capital
    Total debtUSD 2.2bn13.7% of capital, book value as a proxy
    Tax rate20.1%Effective, capped at statutory
    WACC8.16%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 353.61

    69% of EV

    Forecast FCFF, final year
    USD 1.4bn
    Capex at depreciation, working capital in reinvestment
    USD 1.1bn
    Less reinvestment at g/ROIC (25.4% of NOPAT)
    USD -289.3m
    Capitalised
    USD 849.1m
    ROIC (reported)
    9.8%
    Terminal value, undiscounted
    USD 15.4bn
    Terminal value, discounted
    USD 10.8bn
    Enterprise value
    USD 15.7bn
    Less net debt
    USD -2.3bn
    Equity value
    USD 18.1bn

    Exit at 8.7x EBITDA

    Value per shareUSD 334.16

    67% of EV

    Terminal value, undiscounted
    USD 14.0bn
    Terminal value, discounted
    USD 9.8bn
    Enterprise value
    USD 14.7bn
    Less net debt
    USD -2.3bn
    Equity value
    USD 17.1bn

    Spread between methods: 6%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.16%460.96479.20502.17532.14573.02
    7.16%392.48401.43412.13425.19441.59
    8.16%344.39348.69353.61359.33366.10
    9.16%308.72310.51312.44314.57316.94
    10.16%282.01282.71283.42284.13284.84

    Outlined: this model. Green text: above today's price of 282.23. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year7.9%2.9%-5.0pp
    EBIT margin6.7%4.9%-1.9pp
    Discount rate8.2%10.2%+2.1pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.