If you’re exploring the best stock market opportunities for long term stocks, this data-backed valuation of Allstate Corporation (NYSE: ALL) is a must read. Using a scenario-based Discounted Cash Flow (DCF) model covering Bear, Base, and Bull cases, this report identifies Allstate as one of the most undervalued stocks available in online stock trading. The analysis also includes a dividend sustainability review based on free cash flow, offering key insights for anyone serious about trading and investing with a long term mindset.
All values are in millions of USD, unless otherwise noted.
I. DCF Valuation — Bear Case
- EBITDA Growth Rate: 2%
- Terminal Growth Rate: 1.5%
- Discount Rate: 9%
- Sum of PV of UFCF (2024–2029): $18,860
- Terminal Value (TV): $69,062
- PV of Terminal Value: $44,886
- Enterprise Value (EV): $63,746
- Net Debt: -$55,753 (Net cash)
- Equity Value: $119,499
- Shares Outstanding: 268M
- Intrinsic Value per Share: $445.56
II. DCF Valuation — Base Case
- EBITDA Growth Rate: 4%
- Terminal Growth Rate: 2.5%
- Discount Rate: 7.5%
- Sum of PV of UFCF (2024–2029): $20,866
- Terminal Value (TV): $116,041
- PV of Terminal Value: $80,830
- Enterprise Value (EV): $101,695
- Net Debt: -$55,753
- Equity Value: $157,448
- Shares Outstanding: 268M
- Intrinsic Value per Share: $587.06
III. DCF Valuation — Bull Case
- EBITDA Growth Rate: 6%
- Terminal Growth Rate: 3.5%
- Discount Rate: 6.5%
- Sum of PV of UFCF (2024–2029): $22,793
- Terminal Value (TV): $216,058
- PV of Terminal Value: $157,697
- Enterprise Value (EV): $180,490
- Net Debt: -$55,753
- Equity Value: $236,243
- Shares Outstanding: 268M
- Intrinsic Value per Share: $880.85
IV. Valuation Summary and Upside Potential
- Current Price: $195
- Bear Case Intrinsic Value: $445.56 → 128% upside
- Base Case Intrinsic Value: $587.06 → 201% upside
- Bull Case Intrinsic Value: $880.85 → 352% upside
V. Dividend Sustainability Analysis
- Dividend per Share: $3.76
- Shares Outstanding: 268M
- Total Dividends Paid: $1,008M
- Free Cash Flow (Used for Analysis): $8,968M
- Dividend Payout Ratio (FCF Basis):
$1,008 / $8,968 ≈ 11.2% - Assessment:
- The payout ratio is well below conservative thresholds (typically 50–60%)
- Indicates a highly sustainable dividend with strong potential for increases
- Reinforced by ALL’s strong net cash position
- Conclusion: Dividend is very safe, and the company retains ample financial flexibility to continue or expand its shareholder returns.
VI. Summary View
This valuation article avoids opinion and instead emphasizes quantifiable financial models and scenario planning.
- DCF Takeaway: ALL is materially undervalued across all projected growth scenarios
- Dividend View: Secure with significant room to grow
- Quantitative Insight: At $195, Allstate trades at a steep discount to intrinsic value in all modeled outcomes
Valuation Range: $445.56 – $880.85
