Are BEN shares worth considering in October?

Core Insights - Bendigo & Adelaide Bank Ltd's share price is under scrutiny as ASX investors attempt to establish a price target for the company [1][2] - The Australian banking sector constitutes approximately 30% of the share market by market capitalization, highlighting its significance [2] Valuation Methods - The Price-to-Earnings (PE) ratio is a key metric for valuing bank shares, comparing share price to earnings per share [3] - A PE ratio of 15.1x for Bendigo & Adelaide Bank is noted, which is lower than the banking sector average of 20x, suggesting potential undervaluation [5] - A sector-adjusted PE valuation for Bendigo & Adelaide Bank is calculated at $17.26 based on its earnings per share [5] Dividend Valuation - The Dividend Discount Model (DDM) is a robust method for valuing banks, relying on past or forecasted dividends and a risk rate [6][7] - Using a DDM approach, the valuation of Bendigo & Adelaide Bank shares is estimated at $13.32, with an adjusted dividend leading to a valuation of $13.75 [10] - Considering fully franked dividends, a gross dividend payment forecast of $0.93 results in a valuation of $19.64 [11] Growth and Risk Analysis - Various growth and risk rate scenarios yield different valuations, with a risk rate of 6% and a growth rate of 2% resulting in a valuation of $16.25 [12] - The analysis emphasizes the importance of assessing net interest margins and regulatory challenges in the context of lending and non-interest income [13] Management and Culture - The assessment of Bendigo & Adelaide Bank's management and corporate culture is crucial for long-term investment considerations, with noted imperfections in its culture [13]