TYG
Tortoise Energy Infrastructure Corporation
$44.36
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 74.8% below fair value
You pay
$44.36
Bear
$123.45
Fair
$176.35
Bull
$229.26
Bear
$123.45
+178.3%
ROTCE 4.0% → 0.30x TBV
Fair
$176.35
+297.5%
ROTCE 2.0% → 0.30x TBV
Bull
$229.26
+416.8%
ROTCE 2.3% → 0.30x TBV
Key Value Driver
ROTCE (2.0%) vs. cost of equity (8.3%)
Implied Market Multiple
0.78x
Summary
With ROTCE of 2.0% vs. 8.3% cost of equity, fair P/TBV is 0.30x on $57.07 tangible book, implying $176.35 per share. DDM cross-check: $69.33.
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 (2.0%) is below the minimum investors require (8.3%). This means the bank is worth less than the net assets on its books.
Dividend-based valuation: $69.33 (61% 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