As of May 23, 2025, Scottish American Investment Company P L C's estimated intrinsic value ranges from $184.60 to $400.01 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $400.01 | -22.2% |
| Discounted Cash Flow (5Y) | $386.66 | -24.8% |
| Dividend Discount Model (Multi-Stage) | $330.37 | -35.7% |
| Dividend Discount Model (Stable) | $336.50 | -34.5% |
| Earnings Power Value | $184.60 | -64.1% |
Is Scottish American Investment Company P L C (SAIN.L) undervalued or overvalued?
With the current market price at $514.00, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Scottish American Investment Company P L C'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 | 0.83 | 1 |
| Cost of equity | 9.0% | 12.0% |
| Cost of debt | 4.6% | 4.8% |
| Tax rate | 1.8% | 2.3% |
| Debt/Equity ratio | 0.11 | 0.11 |
| After-tax WACC | 8.5% | 11.2% |
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 | $387 | $732M | 67.7% |
| 10-Year Growth | $400 | $755M | 46.4% |
| 5-Year EBITDA | $217 | $452M | 47.6% |
| 10-Year EBITDA | $280 | $556M | 27.3% |
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 | $39M |
| Discount Rate (WACC) | 11.2% - 8.5% |
| Enterprise Value | $343M - $453M |
| Net Debt | $92M |
| Equity Value | $251M - $361M |
| Outstanding Shares | 2M |
| Fair Value | $151 - $218 |
| Selected Fair Value | $184.60 |
| Metric | Value |
|---|---|
| Market Capitalization | $851M |
| Enterprise Value | $943M |
| Trailing P/E | 16.41 |
| Forward P/E | 15.24 |
| Trailing EV/EBITDA | 5.50 |
| Current Dividend Yield | 301.07% |
| Dividend Growth Rate (5Y) | 8.77% |
| Debt-to-Equity Ratio | 0.11 |
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% | $120.00 |
| Discounted Cash Flow (5Y) | 25% | $96.66 |
| Dividend Discount Model (Multi-Stage) | 20% | $66.07 |
| Dividend Discount Model (Stable) | 15% | $50.47 |
| Earnings Power Value | 10% | $18.46 |
| Weighted Average | 100% | $351.68 |
Based on our comprehensive valuation analysis, Scottish American Investment Company P L C's weighted average intrinsic value is $351.68, which is approximately 31.6% below the current market price of $514.00.
Key investment considerations:
Given these factors, we believe Scottish American Investment Company P L C is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.