What is MMAC's Intrinsic value?

MMA Capital Holdings Inc (MMAC) Intrinsic Value Analysis

Executive Summary

As of June 15, 2025, MMA Capital Holdings Inc's estimated intrinsic value ranges from $24.60 to $28.29 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $24.60 -11.4%
Dividend Discount Model (Stable) $28.29 +1.9%

Is MMA Capital Holdings Inc (MMAC) undervalued or overvalued?

With the current market price at $27.77, 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 MMA Capital Holdings 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 0.99 1.26
Cost of equity 7.4% 10.7%
Cost of debt 5.0% 5.0%
Tax rate 9.4% 15.0%
Debt/Equity ratio 1.49 1.49
After-tax WACC 5.7% 6.9%

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: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.1%
  • Long-term growth rate: 4.0%
  • Fair value: $24.60 (-11.4% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 10.7% (Low) to 7.4% (High)
  • Long-term growth rate: 3.0% (Low) to 5.0% (High)
  • Fair value range: $11 to $46
  • Selected fair value: $28.29 (1.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $159M
Enterprise Value $355M
Trailing P/E 22.99
Forward P/E 17.95
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.49

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% $4.92
Dividend Discount Model (Stable) 43% $4.24
Weighted Average 100% $26.19

Investment Conclusion

Based on our comprehensive valuation analysis, MMA Capital Holdings Inc's weighted average intrinsic value is $26.19, which is approximately 5.7% below the current market price of $27.77.

Key investment considerations:

  • Overall financial health and market position

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