What is BOKF's Intrinsic value?

BOK Financial Corp (BOKF) Intrinsic Value Analysis

Executive Summary

As of June 2, 2025, BOK Financial Corp's estimated intrinsic value ranges from $95.78 to $107.49 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $95.78 +1.4%
Dividend Discount Model (Stable) $107.49 +13.8%

Is BOK Financial Corp (BOKF) undervalued or overvalued?

With the current market price at $94.42, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate BOK Financial Corp's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.93 1.04
Cost of equity 8.2% 10.7%
Cost of debt 5.0% 5.0%
Tax rate 21.9% 22.4%
Debt/Equity ratio 0.24 0.24
After-tax WACC 7.3% 9.4%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 25.7%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.4%
  • Long-term growth rate: 2.0%
  • Fair value: $95.78 (1.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.7% (Low) to 8.2% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $63 to $152
  • Selected fair value: $107.49 (13.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $6067M
Enterprise Value $7102M
Trailing P/E 10.84
Forward P/E 11.08
Trailing EV/EBITDA 0.00
Current Dividend Yield 237.14%
Dividend Growth Rate (5Y) -0.25%
Debt-to-Equity Ratio 0.24

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 57% $19.16
Dividend Discount Model (Stable) 43% $16.12
Weighted Average 100% $100.80

Investment Conclusion

Based on our comprehensive valuation analysis, BOK Financial Corp's weighted average intrinsic value is $100.80, which is approximately 6.8% above the current market price of $94.42.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.24)

Given these factors, we believe BOK Financial Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.