Value Investing News - Valuing US Bancorp - Comments

USB Book Value

ogradybs — Sat, 21 Apr 2007 13:58:53 -0400

Should the current book value of USB (about 3) be a concern? I tend to shy away from banks with a BV over 2. USB's BV has an historical range of between two and three. I would be more enthusiastic if the BV was closer to 2.

I would prefer to use

random_walker — Tue, 10 Apr 2007 01:25:14 -0400

I would prefer to use private market or capitalization of earnings. This model seems to use multiple subjective inputs which could give rise to error in the output. May be you should try doing a sensitivity analysis by varying the subjective inputs into the model i.e. what if the high growth period turns out to be only 5 years instead of 10 and the stable growth period is only at 3%

US Bancorp has an ROA of

George — Sun, 01 Apr 2007 19:35:41 -0400

US Bancorp has an ROA of 2.23%. In regards to ROE, Buffett tends to emphasize ROE when he discusses all sorts of companies.

Great Model

TheMarleyGroup — Sun, 01 Apr 2007 03:10:10 -0400

The wide array of inputs that were taken into consideration in that model was pretty neat. Looks to be a well reasoned approach towards valuing the bank.

The Marley Group

I've read some brief

Mark Perkins — Sat, 31 Mar 2007 22:24:00 -0400

I've read some brief articles on USBancorp. I think I remember seeing how people put emphasis on ROE with USB. I don't understand how this is good for a bank. I remember reading, though I don't know enough on valuing banks that ROA is more important with banks. I believe Buffett has bought banks with ROA above 1% which is good for a bank I believe.

Model inputs

George — Sat, 31 Mar 2007 08:35:18 -0400

Hi Mr. Wallstreet,

Thanks for looking over my inputs. I should look at Barclays and Wells Fargo as well with this model once I get more confident with it.

I don't really like the ABN Amro merger. I'm not sure Barclays is really getting a good price. The one thing I do like about it is that it expands Barclays international reach pretty dramatically.

Delete is off for security

George — Sat, 31 Mar 2007 08:30:36 -0400

Delete is off for security reasons.

thats a cool model. I just

Mark Perkins — Sat, 31 Mar 2007 04:52:01 -0400

whoops accidental no delete availible?

thats a cool model. I just

Mark Perkins — Sat, 31 Mar 2007 04:50:02 -0400

thats a cool model. I just glanced at the inputs didnt check anything though. I was just looking at Barclays PLC ADR (BCS) keeping it simple in my analysis,right before i read this actually. current 5% div yield in 50's, 10% earnings yield possible growth of dividend given their history. If the dividend stays flat for 10 yrs from the dividends alone one gets a 4.15% return from div income. what I don't know is how the ABN Amro Advises merger will affect the companies balance sheet.

Dividend Discount model

George — Fri, 30 Mar 2007 19:42:40 -0400

Just click on the headline above to visit the article at Fat Pitch Financials or click here. The model is posted at Google Spreadsheets here.

The trackback url is something used by bloggers to cross reference posts. It does not work by directly going to that link. Read the entry at Wikipedia on trackback for more details.

US Bancorp valuation

snash02 — Fri, 30 Mar 2007 18:28:06 -0400

George
I tried to use the trackback URL and got the follwoing message:

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I would like to take a look at your spreadsheet but maybe I am to new to this board. How do I see your model?

Regards
snash02

Please review

George — Fri, 30 Mar 2007 13:00:33 -0400

I'm hoping to get some feedback on my attempt at valuing US Bancorp. Please look over my work and the model used and let me know where I may have made mistakes. Thanks.

Valuing US Bancorp

George — Fri, 30 Mar 2007 12:55:22 -0400

Given all the attention that US Bancorp has been getting here as a result of Warren Buffett's increased stake in the company, I decided it was time for me to attempt to value the company. This article details how I used a dividend discount model spreadsheet produced by Professor Damodaran to value US Bancorp.