As of May 29, 2025, Overseas Shipholding Group Inc's estimated intrinsic value ranges from $7.95 to $16.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $15.03 | +77.0% |
| Discounted Cash Flow (5Y) | $12.38 | +45.8% |
| Dividend Discount Model (Multi-Stage) | $7.95 | -6.3% |
| Dividend Discount Model (Stable) | $9.98 | +17.5% |
| Earnings Power Value | $16.01 | +88.6% |
Is Overseas Shipholding Group Inc (OSG) undervalued or overvalued?
With the current market price at $8.49, the stock appears to be significantly 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 Overseas Shipholding Group Inc'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 | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.62 | 1.1 |
| Cost of equity | 6.7% | 11.0% |
| Cost of debt | 6.1% | 6.2% |
| Tax rate | 15.8% | 18.5% |
| Debt/Equity ratio | 0.66 | 0.66 |
| After-tax WACC | 6.1% | 8.7% |
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 | $12 | $1,204M | 74.3% |
| 10-Year Growth | $15 | $1,395M | 55.6% |
| 5-Year EBITDA | $8 | $885M | 65.0% |
| 10-Year EBITDA | $11 | $1,103M | 43.9% |
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 | $105M |
| Discount Rate (WACC) | 8.7% - 6.1% |
| Enterprise Value | $1,209M - $1,723M |
| Net Debt | $312M |
| Equity Value | $896M - $1,410M |
| Outstanding Shares | 72M |
| Fair Value | $12 - $20 |
| Selected Fair Value | $16.01 |
| Metric | Value |
|---|---|
| Market Capitalization | $612M |
| Enterprise Value | $924M |
| Trailing P/E | 9.41 |
| Forward P/E | 9.88 |
| Trailing EV/EBITDA | 5.00 |
| Current Dividend Yield | 69.60% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.66 |
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% | $4.51 |
| Discounted Cash Flow (5Y) | 25% | $3.09 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.59 |
| Dividend Discount Model (Stable) | 15% | $1.50 |
| Earnings Power Value | 10% | $1.60 |
| Weighted Average | 100% | $12.29 |
Based on our comprehensive valuation analysis, Overseas Shipholding Group Inc's weighted average intrinsic value is $12.29, which is approximately 44.8% above the current market price of $8.49.
Key investment considerations:
Given these factors, we believe Overseas Shipholding Group Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.