How you can value the BEN share price

Core Viewpoint - Bendigo & Adelaide Bank Ltd (BEN) operates primarily in the retail banking sector with a focus on community branches, and its financial performance is assessed through key metrics such as net interest margin (NIM), return on equity (ROE), and capital structure ratios [2][5][9]. Group 1: Company Overview - Bendigo Bank was formed from the merger of Bendigo and Adelaide Banks in November 2007, operating over 500 community branches mainly on the East Coast and South Australia [2]. - The bank's workplace culture rating is 2.9/5, which is below the sector average of 3.1, indicating potential challenges in employee retention and satisfaction [4]. Group 2: Financial Metrics - The net interest margin (NIM) for Bendigo & Adelaide Bank is 1.9%, which is above the ASX major banks' average of 1.78%, highlighting its effective lending practices [6]. - The bank earned 87% of its total income from lending activities last year, emphasizing the importance of lending performance to overall revenue [7]. - The return on equity (ROE) for Bendigo & Adelaide Bank is 7.9%, which is lower than the sector average of 9.35%, suggesting room for improvement in profitability relative to shareholder equity [8]. - The common equity tier one (CET1) ratio stands at 11.3%, which is below the sector average, indicating a weaker capital buffer compared to peers [9]. Group 3: Valuation and Dividends - The total dividend for the last year was $0.63, with projected growth rates between 2% and 4%, leading to various estimated share price valuations ranging from $7.22 to $32.50 based on different risk rates [10][11]. - An adjusted dividend payment of $0.65 per share results in a valuation of $13.75, while a gross dividend valuation, including franking credits, suggests a fair value of $19.64 [11][12]. - The current share price of $12.72 indicates that the stock may appear expensive based on the dividend discount model (DDM) analysis [12].