What is CHBH's Intrinsic value?

Croghan Bancshares Inc (CHBH) Intrinsic Value Analysis

Executive Summary

As of June 26, 2025, Croghan Bancshares Inc's estimated intrinsic value ranges from $86.73 to $140.12 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $86.73 +82.9%
Dividend Discount Model (Stable) $140.12 +195.5%

Is Croghan Bancshares Inc (CHBH) undervalued or overvalued?

With the current market price at $47.42, the stock appears to be significantly undervalued.

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 Croghan Bancshares 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 0.85 0.94
Cost of equity 6.8% 9.1%
Cost of debt 5.0% 5.0%
Tax rate 17.0% 17.5%
Debt/Equity ratio 0.28 0.28
After-tax WACC 6.2% 8.0%

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: 15.2%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.9%
  • Long-term growth rate: 0.5%
  • Fair value: $86.73 (82.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.1% (Low) to 6.8% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $85 to $171
  • Selected fair value: $140.12 (195.5% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $97M
Enterprise Value $97M
Trailing P/E 0.00
Forward P/E 6.20
Trailing EV/EBITDA 0.00
Current Dividend Yield 473.41%
Dividend Growth Rate (5Y) 9.00%
Debt-to-Equity Ratio 0.28

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% $17.35
Dividend Discount Model (Stable) 43% $21.02
Weighted Average 100% $109.61

Investment Conclusion

Based on our comprehensive valuation analysis, Croghan Bancshares Inc's weighted average intrinsic value is $109.61, which is approximately 131.2% above the current market price of $47.42.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.28)
  • Historical dividend growth of 9.00%

Given these factors, we believe Croghan Bancshares Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.