Empire District Electric Co (Empire District Electric Co) Intrinsic Value: DCF (Dividends Based) : $14.23 (As of May. 06, 2024)

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What is Empire District Electric Co Intrinsic Value: DCF (Dividends Based)?

As of today (2024-05-06), Empire District Electric Co's intrinsic value calculated from the Discounted Dividend model is $14.23.

Note: Discounted Dividend model is only suitable for companies who have a consistant distribution history. If the company's dividends does not remain steady over a long period, results may not be accurate due to the low consistency. The model is also only suitable for predictable companies (Business Predictability Rank higher than 1-Star) with dividend payments. If the company's Predictability Rank is 1-Star or Not Rated, or if the company does not pay dividend, the data will not be stored into our database.

Empire District Electric Co's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety % (DCF Dividends Based) using Discounted Dividend Model for Empire District Electric Co is -139.56%.

The historical rank and industry rank for Empire District Electric Co's Intrinsic Value: DCF (Dividends Based) or its related term are showing as below:

EDE's Price-to-DCF (Dividends Based) is not ranked ^*
in the Utilities - Regulated industry.
Industry Median: 1.17
* Ranked among companies with meaningful Price-to-DCF (Dividends Based) only.

Empire District Electric Co Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for Empire District Electric Co's Intrinsic Value: DCF (Dividends Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Empire District Electric Co Intrinsic Value: DCF (Dividends Based) Chart

Empire District Electric Co Annual Data

Trend

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Intrinsic Value: DCF (Dividends Based)

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Empire District Electric Co Quarterly Data
	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16
Intrinsic Value: DCF (Dividends Based)	Get a 7-Day Free Trial															-	-	-	-	-

Competitive Comparison of Empire District Electric Co's Intrinsic Value: DCF (Dividends Based)

For the Utilities - Regulated Electric subindustry, Empire District Electric Co's Price-to-DCF (Dividends Based), along with its competitors' market caps and Price-to-DCF (Dividends Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Empire District Electric Co's Price-to-DCF (Dividends Based) Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, Empire District Electric Co's Price-to-DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where Empire District Electric Co's Price-to-DCF (Dividends Based) falls into.

Empire District Electric Co Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. The calculation method is the same as Discounted Cash Flow model except adjusted dividend are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.51%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year Dividend Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year Dividend Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year Dividend Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Empire District Electric Co's average Dividend Growth Rate in the past 3 years was 0.00%, which is less than 5%. GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: adjusted dividends per share = $1.233.
GuruFocus uses adjusted dividends per share by default to ensure that the valuation reflects the total value of the company, as the actual dividend is only a portion of the total value.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

Empire District Electric Co's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

Intrinsic Value: DCF (Dividends Based)	=	Dividends per Share	*	{[(1+g1)/(1+d)	+	(1+g1)^2/(1+d)^2	+	...	+	(1+g1)^10/(1+d)^10]
	+	(1+g1)^10/(1+d)^10	*	[(1+g2)/(1+d)	+	(1+g2)^2/(1+d)^2	+	...	+	(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Dividends Based)

Dividends per Share

{[x

x^2

...

x^10]

x^10

y^2

...

y^10]}

Dividends per Share

(1-x^10)

(1-x)

x^10

(1-y^10)

(1-y)]

1.233

11.5406

14.23

Margin of Safety % (DCF Dividends Based)	=	(Intrinsic Value: DCF (Dividends Based)	-	Current Price)	/	Intrinsic Value: DCF (Dividends Based)
	=	(14.23	-	34.09)	/	14.23
	=	-139.56 %

Empire District Electric Co (NYSE:EDE) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.

Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

Empire District Electric Co Intrinsic Value: DCF (Dividends Based) Related Terms

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Empire District Electric Co (Empire District Electric Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Empire District Electric Co (NYSE:EDE) » Definitions » Intrinsic Value: DCF (Dividends Based)

Traded in Other Exchanges

N/A

Address

Website

http://www.empiredistrict.com

Empire District Electric Co is a Kansas corporation organized in 1909. The Company is an operating public utility engaged in the generation, purchase, transmission, distribution and sale of electricity in parts of Missouri, Kansas, Oklahoma and Arkansas. The Company operates its businesses as three segments; Electric, Gas and Other. The Company also provides water service to three towns in Missouri. The Company, along with its subsidiary The Empire District Gas Company, is engaged in the distribution of natural gas in Missouri. The Other segment consists of fiber optics business. As of December 31, 2013 the Company's electric operations serve approximately 168,800 customers and gas operations serve approximately 44,000 customers. The territory served by electric operations embraces an area of about 10,000 square miles, located principally in southwestern Missouri, and also includes smaller areas in southeastern Kansas, northeastern Oklahoma and northwestern Arkansas. The Company supplies electric service at retail to 119 incorporated communities as of December 31, 2013, and to various unincorporated areas and at wholesale to four municipally owned distribution systems. The Company operates under franchises having original terms of twenty years or longer in the incorporated communities. The three largest classes of on-system customers are residential, commercial and industrial. The largest single on-system wholesale customer is the city of Monett, Missouri. The Company currently supplements its on-system generating capacity with purchases of capacity and energy from other sources in order to meet the demands of its customers and the capacity margins applicable under current pooling agreements and National Electric Reliability Council rules. The generating facilities consist of three coal-fired generating plants, two natural gas generating plants and one hydroelectric generating plant. The Company's gas operations serve customers in northwest, north central and west central Missouri. As of December 31, 2013, gas operations served approximately 44,000 customers. The Company provides natural gas distribution to 48 communities and 377 transportation customers as of December 31, 2013. At December 31, 2013 the principal gas utility properties of the Company consisted of approximately 87 miles of transmission mains and approximately 1,160 miles of distribution mains. The three pipelines that serve the Company's gas customers are Southern Star Central Gas Pipeline, Panhandle Eastern Pipe Line Company and ANR Pipeline Company. The Company is subject to the jurisdiction of the Missouri Public Service Commission (MPSC), the State Corporation Commission of the State of Kansas (KCC), the Corporation Commission of Oklahoma (OCC) and the Arkansas Public Service Commission (APSC) with respect to services and facilities, rates and charges, regulatory accounting, valuation of property, depreciation and various other matters.

Executives

Herbert J Schmidt	director	1950 LAKE RIDGE DRIVE, THE VILLAGES FL 32162
Ross C Hartley	director	P O BOX 477 TENTON VILLAGE WY 83025
Thomas M Ohlmacher	director	P O BOX 1400, RAPID CITY SD 57709-1400
Bonnie Cruickshank Lind	director	3460 PRESTON RIDGE ROAD, ALPHARETTA GA 30005
Francis E Jeffries	director	800 SCUDDERS HILL ROAD, PLAINSBORO NJ 08536