DCOM
Dime Community Bancshares, Inc.
$42.93
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Overvalued
Trading 64.7% above fair value
You pay
$42.93
Bear
$18.25
Fair
$26.07
Bull
$33.89
Bear
$18.25
-57.5%
ROTCE 6.3% → 0.39x TBV
Fair
$26.07
-39.3%
ROTCE 8.4% → 0.75x TBV
Bull
$33.89
-21.1%
ROTCE 9.7% → 0.97x TBV
Adjust Assumptions
8.4%
9.8%
Key Value Driver
ROTCE (8.4%) vs. cost of equity (9.8%)
Implied Market Multiple
1.44x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$48.50
Divergence from AlphaVal
46%
Summary
With ROTCE of 8.4% vs. 9.8% cost of equity, fair P/TBV is 0.75x on $29.83 tangible book, implying $26.07 per share. DDM cross-check: $11.19.
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.
Return on equity (8.4%) is below the minimum investors require (9.8%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $11.19 (57% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $48.50 (from 10 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
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