What is CNND's Intrinsic value?

Canandaigua National Corp (CNND) Intrinsic Value Analysis

Executive Summary

As of June 17, 2025, Canandaigua National Corp's estimated intrinsic value ranges from $102.45 to $218.18 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $218.18 +18.6%
Dividend Discount Model (Stable) $102.45 -44.3%

Is Canandaigua National Corp (CNND) undervalued or overvalued?

With the current market price at $184.00, 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 Canandaigua National 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 0.88 0.97
Cost of equity 7.9% 10.3%
Cost of debt 5.0% 5.0%
Tax rate 23.6% 23.9%
Debt/Equity ratio 0.15 0.15
After-tax WACC 7.4% 9.5%

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: 16.4%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.1%
  • Long-term growth rate: 0.5%
  • Fair value: $218.18 (18.6% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.3% (Low) to 7.9% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $70 to $135
  • Selected fair value: $102.45 (-44.3% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $346M
Enterprise Value $406M
Trailing P/E 17.80
Forward P/E 7.60
Trailing EV/EBITDA 0.00
Current Dividend Yield 91.93%
Dividend Growth Rate (5Y) 6.44%
Debt-to-Equity Ratio 0.15

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% $43.64
Dividend Discount Model (Stable) 43% $15.37
Weighted Average 100% $168.58

Investment Conclusion

Based on our comprehensive valuation analysis, Canandaigua National Corp's weighted average intrinsic value is $168.58, which is approximately 8.4% below the current market price of $184.00.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.15)
  • Historical dividend growth of 6.44%

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