Discounted Cash Flow Calculation for NSEI:SBILIFE using Excess Returns Model Model
The calculations below outline how an intrinsic value for SBI Life Insurance is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
The current share price of
SBI Life Insurance
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
SBI Life Insurance's
is considered below, and whether this is a fair price.
Price based on past earnings
SBI Life Insurance's earnings available for a low price, and how does
this compare to other companies in the same industry?
SBI Life Insurance's earnings are expected to grow by 14.1% yearly, however this is not considered high growth (20% yearly).
SBI Life Insurance's revenue is expected to grow significantly at over 20% yearly.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
SBI Life Insurance's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
SBI Life Insurance
has a total score of
4/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
SBI Life Insurance's finances.
The net worth of a company is the difference between its assets and liabilities.
SBI Life Insurance is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
SBI Life Insurance's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
SBI Life Insurance's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
SBI Life Insurance has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Are You An Income Investor? Don't Miss Out On SBI Life Insurance Company Limited (NSE:SBILIFE)
Today we'll take a closer look at SBI Life Insurance Company Limited (NSE:SBILIFE) from a dividend investor's perspective. … SBI Life Insurance has only been paying a dividend for a year or so, so investors might be curious about its 0.3% yield. … There are a few simple ways to reduce the risks of buying SBI Life Insurance for its dividend, and we'll go through these below.
SBI Life Insurance Company Limited (NSE:SBILIFE): Commentary On Fundamentals
SBI Life Insurance Company Limited (NSE:SBILIFE) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective. … is a company with great financial health as well as a.
How To Take Advantage Of SBI Life Insurance Company Limited (NSE:SBILIFE) In A Bear Market
High quality stocks such as SBI Life Insurance Company Limited has fared well over time in a fickle stock market, which is why I want to bring it into light amongst all the chaos. … See our latest analysis for SBI Life Insurance. … SBI Life Insurance Company Limited operates as a private life insurance company in India
One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS). … During the unfortunate twelve months during which the SBI Life Insurance share price fell, it actually saw its earnings per share (EPS) improve by 13%. … Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock
Despite Its High P/E Ratio, Is SBI Life Insurance Company Limited (NSE:SBILIFE) Still Undervalued?
We'll look at SBI Life Insurance Company Limited's (NSE:SBILIFE) P/E ratio and reflect on what it tells us about the company's share price. … SBI Life Insurance has a price to earnings ratio of 49.22, based on the last twelve months. … How Do I Calculate SBI Life Insurance's Price To Earnings Ratio
SBI Life Insurance Company Limited (NSE:SBILIFE) Has A ROE Of 17%
Our data shows SBI Life Insurance has a return on equity of 17% for the last year. … That means that for every ₹1 worth of shareholders' equity, it generated ₹0.17 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
SBI Life Insurance Company Limited (NSE:SBILIFE): Has Recent Earnings Growth Beaten Long-Term Trend?
Below, I will assess SBILIFE's latest performance announced on 30 June 2018 and weight these figures against its longer term trend and industry movements. … SBILIFE's trailing twelve-month earnings (from 30 June 2018) of ₹11.9b has? … However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 16%, indicating the rate at which SBILIFE is growing has slowed down
What Does SBI Life Insurance Company Limited's (NSE:SBILIFE) PE Ratio Tell You?
and want to learn about the link between company’s fundamentals and stock market performance. … While this makes SBILIFE appear like a stock to avoid or sell if you own it, you might change your mind after I explain the assumptions behind the P/E ratio. … Check out our latest analysis for SBI Life Insurance
Have Investors Priced In SBI Life Insurance Company Limited's (NSE:SBILIFE) Growth?
Looking at SBI Life Insurance Company Limited’s (NSE:SBILIFE) fundamentals some investors are wondering if its last closing price of ₹649.2 represents a good value for money for this high growth stock. … Let’s take a look at some key metrics to determine whether there's any value here for current and potential future investors. … SBI Life Insurance's extremely high growth potential in the near future is attracting investors
Does SBI Life Insurance Company Limited's (NSE:SBILIFE) 20.53% Earnings Growth Reflect The Long-Term Trend?
In this article, I will take a look at SBI Life Insurance Company Limited's (NSE:SBILIFE) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. … View out our latest analysis for SBI Life Insurance. … How SBILIFE fared against its long-term earnings performance and its industry
SBI Life Insurance Company Limited operates as a private life insurance company in India. The company’s life insurance business comprises of individual life and group business, including participating, non-participating, pension, group gratuity, group leave encashment, group superannuation, group immediate annuity, unit-linked insurance products, variable insurance products, health, and micro insurance. It also provides accident and disability benefit, level term, and critical illness insurance products. SBI Life Insurance Company Limited offers its products through multi-channel distribution network comprising a bancassurance channel, including State Bank of India and an individual agent network; and other distribution channels, such as direct sales, as well as sales through corporate agents, brokers, insurance marketing firms, and other intermediaries. The company was incorporated in 2000 and is based in Mumbai, India. SBI Life Insurance Company Limited is a subsidiary of State Bank of India.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.