Discounted Cash Flow Calculation for OTCPK:ABNR.Y using Excess Returns Model Model
The calculations below outline how an intrinsic value for ABN AMRO Group 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
ABN AMRO Group
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
ABN AMRO Group's
is considered below, and whether this is a fair price.
Price based on past earnings
ABN AMRO Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
ABN AMRO Group's earnings are expected to grow by 4% yearly, however this is not considered high growth (20% yearly).
ABN AMRO Group's revenue is expected to grow by 1.9% yearly, however this is not considered high growth (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.
ABN AMRO Group'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.
ABN AMRO Group
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Kees C. van Dijkhuizen is the Chairman of the Managing Board and CEO of ABN AMRO Incorporated, ABN AMRO Group N.V. and ABN AMRO Bank N.V. since January 1, 2017. He was appointed to the Managing Boards of ABN AMRO Group N.V. and ABN AMRO Bank N.V. in May 2013 and was its Chief Financial Officer from June 1, 2013 to December 31, 2016. He held various positions at the Ministries of Finance and Economic Affairs. He started his career as policy maker at the Budget Affairs Department of the Ministry of Finance. In 1999 he became Director General of the Budget at the Ministry of Finance. From 2000 to 2005, he was appointed Treasurer General. He was Chief Financial Officer of NIBC Bank N.V. from 2005 to 2013, as well as Vice-Chairman from September 2009 to 2013. Furthermore, he was a Member of the Supervisory Council of Museum Meermanno from January 2005 to July 2016, Member of the Supervisory Council of TNO from November 2009 to November 2014 and Board Member of Stichting Bewind (Protector and administrator, testamentary duties, regarding separated capital for part of the House of Oranje-Nassau from June 2010 to January 2017. Also, he was Chairman of the Committee on Supervision of the Dutch Banking Association from February 2012 to January 2017 and Board Member of Stichting Duisenberg School of Finance from June 2013 to September 2016. He completed Master of General Economics from Vrije Universiteit Amsterdam in (1982)
Kees's compensation has been consistent with company performance over the past year, both up more than 20%.
Kees's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
ABN AMRO Group
management team in years:
The average tenure for the ABN AMRO Group management team is less than 2 years, this suggests a new team.
Kees van Dijkhuizen
Chairman of Executive Board & CEO
Vice-Chairman of Executive Board & CFO
Tanja J. A. Cuppen
Chief Risk Officer & Member of the Executive Board
Chief Innovation & Technology Officer and Member of the Executive Board
Regional Head of EMEA for Corporate & Institutional Banking
Head of Investor Relations
Head of Compliance
Jeroen van Maarschalkerweerd
Head of Media Relations & PR
Senior Managing Director of IPO
Chief of Human Resource
Board of Directors Tenure
Average tenure and age of the
ABN AMRO Group
board of directors in years:
The average tenure for the ABN AMRO Group board of directors is less than 3 years, this suggests a new board.
ABN AMRO Group N.V. provides various banking products and services in the Netherlands and internationally. It operates through Retail Banking, Commercial Banking, Private Banking, and Corporate & Institutional Banking segments. The Retail Banking segment offers banking products and services, including labelled residential mortgage products under the Direktbank, Florius, and Moneyou names; and consumer loans under the Alpha Credit Nederland, Credivance, Defam, and GreenLoans names. It also issues, promotes, manages, and processes credit cards; and provides revolving credit card facilities and pension schemes, as well as Internet banking services for savings accounts and mortgages. This segment serves individuals. The Commercial Banking segment offers asset-based solutions, including working capital solutions, equipment leases and loans, and vendor lease services to business clients and clients in the commercial real estate industry. The Private Banking segment provides private banking and private wealth-management-related services under the ABN AMRO MeesPierson, ABN AMRO Private Banking, Banque Neuflize OBC, and Benthmann Bank names. It also provides customized solutions focused on unit-linked contracts. The Corporate & Institutional Banking segment offers loan products, such as structured finance, and trade and commodity finance; flow products; and specialized products comprising clearing and private equities to business clients. The company also provides administrative services for mortgage loans. ABN AMRO Group N.V. was incorporated in 2009 and is headquartered in Amsterdam, the Netherlands.
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