As of May 23, 2025, Duke Royalty Ltd's estimated intrinsic value ranges from $19.74 to $39.96 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $39.96 | +36.6% |
| Discounted Cash Flow (5Y) | $37.97 | +29.8% |
| Dividend Discount Model (Multi-Stage) | $35.66 | +21.9% |
| Dividend Discount Model (Stable) | $19.74 | -32.5% |
| Earnings Power Value | $25.05 | -14.4% |
Is Duke Royalty Ltd (DUKE.L) undervalued or overvalued?
With the current market price at $29.25, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Duke Royalty Ltd's intrinsic value, including:
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 | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.94 | 1.32 |
| Cost of equity | 9.6% | 14.2% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 5.2% | 8.6% |
| Debt/Equity ratio | 0.5 | 0.5 |
| After-tax WACC | 8.0% | 11.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $38 | $263M | 73.3% |
| 10-Year Growth | $40 | $273M | 51.2% |
| 5-Year EBITDA | $31 | $231M | 69.5% |
| 10-Year EBITDA | $35 | $249M | 46.6% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $19M |
| Discount Rate (WACC) | 11.0% - 8.0% |
| Enterprise Value | $168M - $232M |
| Net Debt | $78M |
| Equity Value | $90M - $154M |
| Outstanding Shares | 5M |
| Fair Value | $19 - $32 |
| Selected Fair Value | $25.05 |
| Metric | Value |
|---|---|
| Market Capitalization | $143M |
| Enterprise Value | $221M |
| Trailing P/E | 14.00 |
| Forward P/E | 10.89 |
| Trailing EV/EBITDA | 10.70 |
| Current Dividend Yield | 836.90% |
| Dividend Growth Rate (5Y) | 17.66% |
| Debt-to-Equity Ratio | 0.50 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $11.99 |
| Discounted Cash Flow (5Y) | 25% | $9.49 |
| Dividend Discount Model (Multi-Stage) | 20% | $7.13 |
| Dividend Discount Model (Stable) | 15% | $2.96 |
| Earnings Power Value | 10% | $2.50 |
| Weighted Average | 100% | $34.08 |
Based on our comprehensive valuation analysis, Duke Royalty Ltd's weighted average intrinsic value is $34.08, which is approximately 16.5% above the current market price of $29.25.
Key investment considerations:
Given these factors, we believe Duke Royalty Ltd is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.