DCOM
Dime Community Bancshares, Inc.
$36.90
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Overvalued
Trading 28.3% above fair value
You pay
$36.90
Bear
$20.13
Fair
$28.76
Bull
$37.38
Bear
$20.13
-45.4%
ROTCE 6.3% → 0.40x TBV
Fair
$28.76
-22.1%
ROTCE 8.4% → 0.76x TBV
Bull
$37.38
+1.3%
ROTCE 9.7% → 0.98x TBV
Key Value Driver
ROTCE (8.4%) vs. cost of equity (9.8%)
Implied Market Multiple
1.24x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $39.50 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $28.76 per share.
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: $11.26 (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 $39.50 (from 10 analysts). Our estimate is 34% 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