What is CCFN's Intrinsic value?

CCFNB Bancorp Inc (CCFN) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, CCFNB Bancorp Inc's estimated intrinsic value ranges from $36.20 to $38.10 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $36.20 -20.4%
Dividend Discount Model (Stable) $38.10 -16.3%

Is CCFNB Bancorp Inc (CCFN) undervalued or overvalued?

With the current market price at $45.50, the stock appears to be moderately overvalued.

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 CCFNB Bancorp Inc'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 3.2% 3.7%
Equity market risk premium 4.2% 5.2%
Adjusted beta 0.65 0.92
Cost of equity 5.9% 9.0%
Cost of debt 5.0% 5.0%
Tax rate 16.5% 18.4%
Debt/Equity ratio 1.3 1.3
After-tax WACC 4.9% 6.2%

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: 31.3%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.5%
  • Long-term growth rate: 1.0%
  • Fair value: $36.20 (-20.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.0% (Low) to 5.9% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $36 to $88
  • Selected fair value: $38.10 (-16.3% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $161M
Enterprise Value $161M
Trailing P/E 0.00
Forward P/E 16.57
Trailing EV/EBITDA 0.00
Current Dividend Yield 456.76%
Dividend Growth Rate (5Y) 2.48%
Debt-to-Equity Ratio 1.30

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% $7.24
Dividend Discount Model (Stable) 43% $5.72
Weighted Average 100% $37.02

Investment Conclusion

Based on our comprehensive valuation analysis, CCFNB Bancorp Inc's weighted average intrinsic value is $37.02, which is approximately 18.6% below the current market price of $45.50.

Key investment considerations:

  • Historical dividend growth of 2.48%

Given these factors, we believe CCFNB Bancorp Inc is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.