Discounted Cash Flow (DCF) Analysis Levered

MGIC Investment Corporation (MTG)

$13.66

+0.59 (+4.51%)
All numbers are in Millions, Currency in USD
Stock DCF: 21.98 | 13.66 | undervalue

Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 1,066.051,123.851,213.981,199.151,185.671,218.571,252.371,287.111,322.811,359.51
Revenue (%)
Operating Cash Flow 406.66544.52609.53732.31696.32625.38642.72660.55678.88697.71
Operating Cash Flow (%)
Capital Expenditure -16.07-14.24-5.64-3.31-4.12-9.41-9.67-9.94-10.22-10.50
Capital Expenditure (%)
Free Cash Flow 390.59530.28603.90729692.20615.97633.05650.61668.66687.21

Weighted Average Cost Of Capital

Share price $ 13.66
Beta 1.578
Diluted Shares Outstanding 351.31
Cost of Debt
Tax Rate 20.80
After-tax Cost of Debt 4.93%
Risk-Free Rate
Market Risk Premium
Cost of Equity 10.416
Total Debt 1,146.71
Total Equity 4,798.87
Total Capital 5,945.58
Debt Weighting 19.29
Equity Weighting 80.71
Wacc

Build Up Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 1,066.051,123.851,213.981,199.151,185.671,218.571,252.371,287.111,322.811,359.51
Operating Cash Flow 406.66544.52609.53732.31696.32625.38642.72660.55678.88697.71
Capital Expenditure -16.07-14.24-5.64-3.31-4.12-9.41-9.67-9.94-10.22-10.50
Free Cash Flow 390.59530.28603.90729692.20615.97633.05650.61668.66687.21
WACC
PV LFCF 563.25529.32497.45467.49439.34
SUM PV LFCF 2,496.84

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.36
Free cash flow (t + 1) 700.95
Terminal Value 9,523.82
Present Value of Terminal Value 6,088.62

Intrinsic Value

Enterprise Value 8,585.46
Net Debt 862.02
Equity Value 7,723.44
Shares Outstanding 351.31
Equity Value Per Share 21.98