Discounted Cash Flow (DCF) Analysis Levered

State Auto Financial Corporation (STFC)

$52.01

0.00 (0.00%)

All numbers are in Millions, Currency in USD

Stock DCF: 24.60 | 52.01 | overvalue

Free Cash Flow

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected
Revenue	1,405.40	1,421.30	1,273.20	1,407.60	1,480.30	1,504.10	1,528.29	1,552.87	1,577.84	1,603.21
Revenue (%)
Operating Cash Flow	113.50	67.90	-13.40	-43.90	49	36.08	36.66	37.24	37.84	38.45
Operating Cash Flow (%)
Capital Expenditure	-	-	-	-	-	-	-	-	-	-
Capital Expenditure (%)
Free Cash Flow	-	-	-	-	-	36.08	36.66	37.24	37.84	38.45

Weighted Average Cost Of Capital

Share price	$ 52.01
Beta	0.359
Diluted Shares Outstanding	44.30
Cost of Debt
Tax Rate	9.03
After-tax Cost of Debt	1.76%
Risk-Free Rate
Market Risk Premium
Cost of Equity	5.192
Total Debt	244.10
Total Equity	2,304.04
Total Capital	2,548.14
Debt Weighting	9.58
Equity Weighting	90.42
Wacc

Build Up Free Cash Flow

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected
Revenue	1,405.40	1,421.30	1,273.20	1,407.60	1,480.30	1,504.10	1,528.29	1,552.87	1,577.84	1,603.21
Operating Cash Flow	113.50	67.90	-13.40	-43.90	49	36.08	36.66	37.24	37.84	38.45
Capital Expenditure	-	-	-	-	-	-	-	-	-	-
Free Cash Flow	-	-	-	-	-	36.08	36.66	37.24	37.84	38.45
WACC
PV LFCF						34.40	33.34	32.30	31.30	30.33
SUM PV LFCF										161.67

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.86
Free cash flow (t + 1)	39.22
Terminal Value	1,371.37
Present Value of Terminal Value	1,081.69

Intrinsic Value

Enterprise Value	1,243.37
Net Debt	153.40
Equity Value	1,089.97
Shares Outstanding	44.30
Equity Value Per Share	24.60