As of May 25, 2025, Schweitzer-Mauduit International Inc's estimated intrinsic value ranges from $23.79 to $67.91 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $67.91 | +190.1% |
| Discounted Cash Flow (5Y) | $58.86 | +151.4% |
| Dividend Discount Model (Multi-Stage) | $41.77 | +78.4% |
| Dividend Discount Model (Stable) | $23.79 | +1.6% |
| Earnings Power Value | $25.96 | +10.9% |
Is Schweitzer-Mauduit International Inc (SWM) undervalued or overvalued?
With the current market price at $23.41, 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 Schweitzer-Mauduit International 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 | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 1.11 | 1.53 |
| Cost of equity | 7.9% | 12.2% |
| Cost of debt | 5.5% | 8.0% |
| Tax rate | 17.3% | 18.3% |
| Debt/Equity ratio | 1.7 | 1.7 |
| After-tax WACC | 5.8% | 8.6% |
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 | $59 | $3,097M | 79.5% |
| 10-Year Growth | $68 | $3,385M | 62.6% |
| 5-Year EBITDA | $5 | $1,370M | 53.6% |
| 10-Year EBITDA | $22 | $1,906M | 33.6% |
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 | $142M |
| Discount Rate (WACC) | 8.6% - 5.8% |
| Enterprise Value | $1,641M - $2,454M |
| Net Debt | $1,220M |
| Equity Value | $421M - $1,234M |
| Outstanding Shares | 32M |
| Fair Value | $13 - $39 |
| Selected Fair Value | $25.96 |
| Metric | Value |
|---|---|
| Market Capitalization | $746M |
| Enterprise Value | $1967M |
| Trailing P/E | 10.83 |
| Forward P/E | 10.00 |
| Trailing EV/EBITDA | 4.00 |
| Current Dividend Yield | 742.39% |
| Dividend Growth Rate (5Y) | 1.60% |
| Debt-to-Equity Ratio | 1.70 |
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% | $20.37 |
| Discounted Cash Flow (5Y) | 25% | $14.72 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.35 |
| Dividend Discount Model (Stable) | 15% | $3.57 |
| Earnings Power Value | 10% | $2.60 |
| Weighted Average | 100% | $49.61 |
Based on our comprehensive valuation analysis, Schweitzer-Mauduit International Inc's weighted average intrinsic value is $49.61, which is approximately 111.9% above the current market price of $23.41.
Key investment considerations:
Given these factors, we believe Schweitzer-Mauduit International Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.