0VQD.L
Chubb Limited
$328.59
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.5% below fair value
You pay
$328.59
Bear
$479.00
Fair
$479.60
Bull
$623.48
Bear
$479.00
+45.8%
ROTCE 16.3% → 4.00x TBV
Fair
$479.60
+46.0%
ROTCE 21.8% → 4.00x TBV
Bull
$623.48
+89.7%
ROTCE 25.1% → 4.00x TBV
Key Value Driver
ROTCE (21.8%) vs. cost of equity (6.7%)
Implied Market Multiple
2.74x
Summary
With ROTCE of 21.8% vs. 6.7% cost of equity, fair P/TBV is 4.00x on $119.75 tangible book, implying $479.60 per share. DDM cross-check: $144.48.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $144.48 (70% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly