CNDCF
Canadian Banc Corp.
$11.00
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 87.4% below fair value
You pay
$11.00
Bear
$61.27
Fair
$87.53
Bull
$113.79
Bear
$61.27
+457.0%
ROTCE 20.0% → 3.21x TBV
Fair
$87.53
+695.8%
ROTCE 25.0% → 4.00x TBV
Bull
$113.79
+934.5%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (33.1%) vs. cost of equity (9.0%)
Implied Market Multiple
1.08x
Summary
With ROTCE of 33.1% vs. 9.0% cost of equity, fair P/TBV is 4.00x on $10.18 tangible book, implying $87.53 per share. DDM cross-check: $11.67.
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: $11.67 (87% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Financial statements were converted from CAD into USD using USDCAD at 0.7256 USD per CAD.
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