Discounted Cash Flow (DCF) Analysis Levered

Selective Insurance Group, Inc. (SIGI)

$100.9

+6.18 (+6.52%)

All numbers are in Millions, Currency in USD

Stock DCF: 291.36 | 100.9 | 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	2,469.98	2,586.08	2,846.49	2,922.27	3,379.16	3,658.51	3,960.95	4,288.39	4,642.91	5,026.72
Revenue (%)
Operating Cash Flow	370.73	454.94	477.49	554.05	771.42	667.05	722.20	781.90	846.54	916.52
Operating Cash Flow (%)
Capital Expenditure	-14.07	-16.11	-30.99	-22.06	-22.16	-27.02	-29.25	-31.67	-34.28	-37.12
Capital Expenditure (%)
Free Cash Flow	356.66	438.83	446.51	531.98	749.26	640.04	692.95	750.23	812.25	879.40

Weighted Average Cost Of Capital

Share price	$ 100.9
Beta	0.632
Diluted Shares Outstanding	60.70
Cost of Debt
Tax Rate	20.08
After-tax Cost of Debt	4.60%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.517
Total Debt	506.05
Total Equity	6,124.63
Total Capital	6,630.68
Debt Weighting	7.63
Equity Weighting	92.37
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	2,469.98	2,586.08	2,846.49	2,922.27	3,379.16	3,658.51	3,960.95	4,288.39	4,642.91	5,026.72
Operating Cash Flow	370.73	454.94	477.49	554.05	771.42	667.05	722.20	781.90	846.54	916.52
Capital Expenditure	-14.07	-16.11	-30.99	-22.06	-22.16	-27.02	-29.25	-31.67	-34.28	-37.12
Free Cash Flow	356.66	438.83	446.51	531.98	749.26	640.04	692.95	750.23	812.25	879.40
WACC
PV LFCF						441.87	449.75	457.77	465.93	474.24
SUM PV LFCF										3,117.77

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.37
Free cash flow (t + 1)	896.99
Terminal Value	20,526.05
Present Value of Terminal Value	15,073.34

Intrinsic Value

Enterprise Value	18,191.11
Net Debt	505.60
Equity Value	17,685.52
Shares Outstanding	60.70
Equity Value Per Share	291.36