What is PFC's Intrinsic value?

Premier Financial Corp (OHIO) (PFC) Intrinsic Value Analysis

Executive Summary

As of June 25, 2025, Premier Financial Corp (OHIO)'s estimated intrinsic value ranges from $38.81 to $42.61 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $42.61 +52.0%
Dividend Discount Model (Stable) $38.81 +38.4%

Is Premier Financial Corp (OHIO) (PFC) undervalued or overvalued?

With the current market price at $28.04, 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 Premier Financial Corp (OHIO)'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 0.37 0.56
Cost of equity 5.6% 8.0%
Cost of debt 5.0% 5.0%
Tax rate 19.9% 20.3%
Debt/Equity ratio 0.09 0.09
After-tax WACC 5.4% 7.7%

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: 50.1%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 6.8%
  • Long-term growth rate: 1.0%
  • Fair value: $42.61 (52.0% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.0% (Low) to 5.6% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $23 to $55
  • Selected fair value: $38.81 (38.4% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $1007M
Enterprise Value $1097M
Trailing P/E 11.39
Forward P/E 12.65
Trailing EV/EBITDA 0.00
Current Dividend Yield 440.36%
Dividend Growth Rate (5Y) 29.79%
Debt-to-Equity Ratio 0.09

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% $8.52
Dividend Discount Model (Stable) 43% $5.82
Weighted Average 100% $40.98

Investment Conclusion

Based on our comprehensive valuation analysis, Premier Financial Corp (OHIO)'s weighted average intrinsic value is $40.98, which is approximately 46.2% above the current market price of $28.04.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.09)
  • Historical dividend growth of 29.79%

Given these factors, we believe Premier Financial Corp (OHIO) is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.