DHIL - Diamond Hill Investment Group, Inc.
Price:
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AlphaVal
Deterministic, archetype-aware fair value
Banks, Insurers & Asset Managers
90% confidence
Primary model: P/Tangible Book × ROE Quality
Adjust Assumptions
27.6%
8.4%
Key Value Driver
ROTCE (27.6%) vs. cost of equity (8.4%)
Implied Market Multiple
2.68x
Plain-Language Summary
With ROTCE of 27.6% vs. 8.4% cost of equity, fair P/TBV is 4.00x on $65.23 tangible book, implying $407.16 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.
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