investorscraft@gmail.com

Intrinsic Value of Capitol Federal Financial, Inc. (CFFN)

Previous Close$6.43
Intrinsic Value
Upside potential
Previous Close
$6.43

VALUATION INPUT DATA

This valuation is based on fiscal year data as of 2024 and quarterly data as of .

Data is not available at this time.

Stock Valuation Context

Business Model And Market Position

Capitol Federal Financial, Inc. operates as a federally chartered savings and loan holding company, primarily serving retail customers through its subsidiary, Capitol Federal Savings Bank. The company focuses on residential mortgage lending, offering one-to-four-family loans, home equity loans, and lines of credit, alongside commercial real estate and consumer loans. Its deposit products include checking, savings, and certificates of deposit, catering primarily to individual and small business clients in Kansas and Missouri. Capitol Federal maintains a conservative lending approach, emphasizing long-term customer relationships and community banking principles. The company operates in a competitive regional banking sector, where it differentiates itself through localized service and a stable funding base. Its market position is reinforced by a strong deposit franchise and a disciplined underwriting strategy, though it faces margin pressures from rising interest rates and regulatory constraints.

Revenue Profitability And Efficiency

For the fiscal year ending September 2024, Capitol Federal reported revenue of $164.6 million and net income of $38.0 million, translating to diluted EPS of $0.29. Operating cash flow stood at $31.2 million, with no capital expenditures recorded. The company’s profitability metrics reflect the challenges of a rising rate environment, compressing net interest margins. Efficiency ratios remain under pressure due to higher funding costs and modest loan growth.

Earnings Power And Capital Efficiency

Capitol Federal’s earnings power is constrained by its reliance on interest income, which accounts for the majority of revenue. The company’s capital efficiency is moderate, with a conservative balance sheet structure prioritizing liquidity and credit quality. Return metrics are subdued compared to peers, reflecting its risk-averse strategy and limited fee-based income diversification.

Balance Sheet And Financial Health

The company maintains a solid balance sheet, with cash and equivalents of $217.3 million against total debt of $2.18 billion. Capitol Federal’s financial health is supported by a stable deposit base and prudent asset-liability management. However, its leverage ratio and interest rate risk exposure warrant monitoring given the current macroeconomic backdrop.

Growth Trends And Dividend Policy

Growth trends are muted, with loan portfolios expanding modestly amid competitive pressures. The company has a consistent dividend policy, distributing $0.34 per share annually, reflecting a payout ratio aligned with earnings. Dividend sustainability hinges on stable net interest income and disciplined capital allocation.

Valuation And Market Expectations

Capitol Federal trades at a valuation reflective of its regional banking profile and earnings challenges. Market expectations remain cautious, factoring in margin pressures and limited near-term growth catalysts. The stock’s performance is closely tied to interest rate trends and deposit cost dynamics.

Strategic Advantages And Outlook

The company’s strategic advantages include a loyal customer base, conservative risk management, and a strong community banking presence. The outlook remains neutral, with profitability likely constrained by macroeconomic headwinds. Long-term success depends on balancing margin preservation with selective growth initiatives in its core markets.

Sources

10-K filings, company financial statements

show cash flow forecast

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year2025202620272028202920302031203220332034203520362037203820392040204120422043204420452046204720482049

INCOME STATEMENT

Revenue growth rate, %NaN
Revenue, $NaN
Variable operating expenses, $mNaN
Fixed operating expenses, $mNaN
Total operating expenses, $mNaN
Operating income, $mNaN
EBITDA, $mNaN
Interest expense (income), $mNaN
Earnings before tax, $mNaN
Tax expense, $mNaN
Net income, $mNaN

BALANCE SHEET

Cash and short-term investments, $mNaN
Total assets, $mNaN
Adjusted assets (=assets-cash), $mNaN
Average production assets, $mNaN
Working capital, $mNaN
Total debt, $mNaN
Total liabilities, $mNaN
Total equity, $mNaN
Debt-to-equity ratioNaN
Adjusted equity ratioNaN

CASH FLOW

Net income, $mNaN
Depreciation, amort., depletion, $mNaN
Funds from operations, $mNaN
Change in working capital, $mNaN
Cash from operations, $mNaN
Maintenance CAPEX, $mNaN
New CAPEX, $mNaN
Total CAPEX, $mNaN
Free cash flow, $mNaN
Issuance/(repurchase) of shares, $mNaN
Retained Cash Flow, $mNaN
Pot'l extraordinary dividend, $mNaN
Cash available for distribution, $mNaN
Discount rate, %NaN
PV of cash for distribution, $mNaN
Current shareholders' claim on cash, %NaN
HomeMenuAccount