Intrinsic value of Popular - BPOP

Previous Close

$47.78

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$47.78

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as BPOP.

We calculate the intrinsic value of BPOP stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -100.00
  3.00
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
Revenue, $m
  0
  1,644
  1,696
  1,754
  1,816
  1,883
  1,955
  2,032
  2,114
  2,201
  2,294
  2,393
  2,498
  2,609
  2,726
  2,850
  2,980
  3,118
  3,264
  3,417
  3,579
  3,749
  3,928
  4,117
  4,316
  4,524
  4,744
  4,975
  5,218
  5,474
  5,742
Variable operating expenses, $m
 
  266
  275
  284
  294
  305
  317
  329
  342
  357
  372
  388
  405
  423
  442
  462
  483
  505
  529
  554
  580
  607
  636
  667
  699
  733
  769
  806
  845
  887
  930
Fixed operating expenses, $m
 
  1,050
  1,073
  1,096
  1,120
  1,145
  1,170
  1,196
  1,222
  1,249
  1,277
  1,305
  1,333
  1,363
  1,393
  1,423
  1,455
  1,487
  1,519
  1,553
  1,587
  1,622
  1,658
  1,694
  1,731
  1,769
  1,808
  1,848
  1,889
  1,930
  1,973
Total operating expenses, $m
  0
  1,316
  1,348
  1,380
  1,414
  1,450
  1,487
  1,525
  1,564
  1,606
  1,649
  1,693
  1,738
  1,786
  1,835
  1,885
  1,938
  1,992
  2,048
  2,107
  2,167
  2,229
  2,294
  2,361
  2,430
  2,502
  2,577
  2,654
  2,734
  2,817
  2,903
Operating income, $m
  0
  328
  349
  373
  401
  433
  468
  507
  549
  596
  646
  701
  760
  823
  891
  965
  1,043
  1,126
  1,216
  1,311
  1,412
  1,520
  1,634
  1,756
  1,885
  2,022
  2,167
  2,321
  2,484
  2,657
  2,839
EBITDA, $m
  59
  4,600
  4,758
  4,931
  5,121
  5,326
  5,548
  5,787
  6,043
  6,317
  6,609
  6,920
  7,251
  7,602
  7,975
  8,370
  8,788
  9,230
  9,698
  10,191
  10,713
  11,263
  11,843
  12,455
  13,100
  13,780
  14,496
  15,251
  16,045
  16,882
  17,762
Interest expense (income), $m
  212
  1,898
  1,740
  1,797
  1,859
  1,926
  1,998
  2,076
  2,159
  2,248
  2,342
  2,443
  2,549
  2,662
  2,782
  2,909
  3,042
  3,184
  3,333
  3,490
  3,655
  3,830
  4,014
  4,207
  4,411
  4,626
  4,851
  5,089
  5,338
  5,600
  5,876
Earnings before tax, $m
  294
  -1,570
  -1,391
  -1,424
  -1,458
  -1,493
  -1,530
  -1,569
  -1,610
  -1,652
  -1,696
  -1,742
  -1,790
  -1,839
  -1,891
  -1,944
  -2,000
  -2,057
  -2,117
  -2,179
  -2,243
  -2,310
  -2,380
  -2,451
  -2,526
  -2,604
  -2,684
  -2,767
  -2,854
  -2,944
  -3,037
Tax expense, $m
  78
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  217
  -1,570
  -1,391
  -1,424
  -1,458
  -1,493
  -1,530
  -1,569
  -1,610
  -1,652
  -1,696
  -1,742
  -1,790
  -1,839
  -1,891
  -1,944
  -2,000
  -2,057
  -2,117
  -2,179
  -2,243
  -2,310
  -2,380
  -2,451
  -2,526
  -2,604
  -2,684
  -2,767
  -2,854
  -2,944
  -3,037

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  38,662
  36,531
  37,700
  38,974
  40,354
  41,843
  43,441
  45,151
  46,976
  48,921
  50,988
  53,182
  55,507
  57,969
  60,572
  63,324
  66,229
  69,295
  72,529
  75,938
  79,530
  83,313
  87,296
  91,489
  95,901
  100,543
  105,426
  110,561
  115,960
  121,637
  127,604
Adjusted assets (=assets-cash), $m
  38,662
  36,531
  37,700
  38,974
  40,354
  41,843
  43,441
  45,151
  46,976
  48,921
  50,988
  53,182
  55,507
  57,969
  60,572
  63,324
  66,229
  69,295
  72,529
  75,938
  79,530
  83,313
  87,296
  91,489
  95,901
  100,543
  105,426
  110,561
  115,960
  121,637
  127,604
Revenue / Adjusted assets
  0.000
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
  0.045
Average production assets, $m
  779
  42,721
  44,088
  45,578
  47,193
  48,933
  50,802
  52,802
  54,937
  57,211
  59,628
  62,194
  64,913
  67,792
  70,837
  74,055
  77,453
  81,038
  84,820
  88,806
  93,007
  97,431
  102,089
  106,993
  112,152
  117,581
  123,291
  129,297
  135,611
  142,250
  149,228
Working capital, $m
  0
  -39,673
  -40,943
  -42,327
  -43,826
  -45,442
  -47,178
  -49,035
  -51,018
  -53,129
  -55,374
  -57,757
  -60,282
  -62,956
  -65,784
  -68,772
  -71,927
  -75,257
  -78,769
  -82,471
  -86,371
  -90,480
  -94,806
  -99,360
  -104,151
  -109,193
  -114,496
  -120,073
  -125,937
  -132,102
  -138,582
Total debt, $m
  1,447
  32,226
  33,278
  34,425
  35,667
  37,007
  38,445
  39,984
  41,627
  43,377
  45,238
  47,212
  49,305
  51,520
  53,864
  56,340
  58,955
  61,714
  64,625
  67,693
  70,925
  74,330
  77,915
  81,688
  85,659
  89,837
  94,232
  98,853
  103,713
  108,822
  114,192
Total liabilities, $m
  33,464
  32,878
  33,930
  35,077
  36,319
  37,658
  39,096
  40,636
  42,279
  44,029
  45,889
  47,863
  49,956
  52,172
  54,515
  56,992
  59,606
  62,366
  65,276
  68,344
  71,577
  74,981
  78,566
  82,340
  86,311
  90,489
  94,883
  99,505
  104,364
  109,473
  114,844
Total equity, $m
  5,198
  3,653
  3,770
  3,897
  4,035
  4,184
  4,344
  4,515
  4,698
  4,892
  5,099
  5,318
  5,551
  5,797
  6,057
  6,332
  6,623
  6,930
  7,253
  7,594
  7,953
  8,331
  8,730
  9,149
  9,590
  10,054
  10,543
  11,056
  11,596
  12,164
  12,760
Total liabilities and equity, $m
  38,662
  36,531
  37,700
  38,974
  40,354
  41,842
  43,440
  45,151
  46,977
  48,921
  50,988
  53,181
  55,507
  57,969
  60,572
  63,324
  66,229
  69,296
  72,529
  75,938
  79,530
  83,312
  87,296
  91,489
  95,901
  100,543
  105,426
  110,561
  115,960
  121,637
  127,604
Debt-to-equity ratio
  0.278
  8.820
  8.830
  8.830
  8.840
  8.840
  8.850
  8.860
  8.860
  8.870
  8.870
  8.880
  8.880
  8.890
  8.890
  8.900
  8.900
  8.910
  8.910
  8.910
  8.920
  8.920
  8.930
  8.930
  8.930
  8.940
  8.940
  8.940
  8.940
  8.950
  8.950
Adjusted equity ratio
  0.134
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  217
  -1,570
  -1,391
  -1,424
  -1,458
  -1,493
  -1,530
  -1,569
  -1,610
  -1,652
  -1,696
  -1,742
  -1,790
  -1,839
  -1,891
  -1,944
  -2,000
  -2,057
  -2,117
  -2,179
  -2,243
  -2,310
  -2,380
  -2,451
  -2,526
  -2,604
  -2,684
  -2,767
  -2,854
  -2,944
  -3,037
Depreciation, amort., depletion, $m
  59
  4,272
  4,409
  4,558
  4,719
  4,893
  5,080
  5,280
  5,494
  5,721
  5,963
  6,219
  6,491
  6,779
  7,084
  7,405
  7,745
  8,104
  8,482
  8,881
  9,301
  9,743
  10,209
  10,699
  11,215
  11,758
  12,329
  12,930
  13,561
  14,225
  14,923
Funds from operations, $m
  655
  2,702
  3,018
  3,134
  3,262
  3,400
  3,550
  3,711
  3,884
  4,069
  4,267
  4,477
  4,702
  4,940
  5,193
  5,461
  5,746
  6,047
  6,365
  6,702
  7,057
  7,433
  7,829
  8,248
  8,689
  9,155
  9,645
  10,162
  10,707
  11,281
  11,886
Change in working capital, $m
  66
  -1,156
  -1,270
  -1,384
  -1,499
  -1,616
  -1,735
  -1,857
  -1,983
  -2,112
  -2,245
  -2,383
  -2,525
  -2,674
  -2,828
  -2,988
  -3,155
  -3,330
  -3,512
  -3,702
  -3,901
  -4,109
  -4,326
  -4,554
  -4,792
  -5,041
  -5,303
  -5,577
  -5,864
  -6,165
  -6,481
Cash from operations, $m
  589
  3,857
  4,287
  4,518
  4,761
  5,016
  5,285
  5,568
  5,866
  6,180
  6,511
  6,860
  7,227
  7,614
  8,021
  8,450
  8,901
  9,376
  9,877
  10,404
  10,958
  11,541
  12,155
  12,801
  13,481
  14,196
  14,948
  15,739
  16,571
  17,446
  18,366
Maintenance CAPEX, $m
  0
  -4,147
  -4,272
  -4,409
  -4,558
  -4,719
  -4,893
  -5,080
  -5,280
  -5,494
  -5,721
  -5,963
  -6,219
  -6,491
  -6,779
  -7,084
  -7,405
  -7,745
  -8,104
  -8,482
  -8,881
  -9,301
  -9,743
  -10,209
  -10,699
  -11,215
  -11,758
  -12,329
  -12,930
  -13,561
  -14,225
New CAPEX, $m
  -100
  -1,252
  -1,367
  -1,490
  -1,614
  -1,740
  -1,869
  -2,000
  -2,135
  -2,274
  -2,417
  -2,566
  -2,719
  -2,879
  -3,045
  -3,218
  -3,398
  -3,586
  -3,782
  -3,986
  -4,200
  -4,424
  -4,658
  -4,903
  -5,160
  -5,429
  -5,710
  -6,005
  -6,314
  -6,639
  -6,978
Cash from investing activities, $m
  -3,444
  -5,399
  -5,639
  -5,899
  -6,172
  -6,459
  -6,762
  -7,080
  -7,415
  -7,768
  -8,138
  -8,529
  -8,938
  -9,370
  -9,824
  -10,302
  -10,803
  -11,331
  -11,886
  -12,468
  -13,081
  -13,725
  -14,401
  -15,112
  -15,859
  -16,644
  -17,468
  -18,334
  -19,244
  -20,200
  -21,203
Free cash flow, $m
  -2,855
  -1,541
  -1,352
  -1,381
  -1,411
  -1,443
  -1,477
  -1,512
  -1,549
  -1,587
  -1,627
  -1,669
  -1,712
  -1,757
  -1,803
  -1,852
  -1,902
  -1,954
  -2,009
  -2,065
  -2,123
  -2,183
  -2,246
  -2,311
  -2,378
  -2,448
  -2,520
  -2,595
  -2,673
  -2,754
  -2,837
Issuance/(repayment) of debt, $m
  -90
  -2,927
  1,052
  1,147
  1,242
  1,339
  1,438
  1,539
  1,643
  1,750
  1,860
  1,974
  2,093
  2,216
  2,343
  2,476
  2,615
  2,759
  2,910
  3,068
  3,233
  3,405
  3,585
  3,774
  3,971
  4,178
  4,395
  4,622
  4,860
  5,109
  5,371
Issuance/(repurchase) of shares, $m
  5
  5,574
  1,508
  1,551
  1,596
  1,642
  1,690
  1,740
  1,793
  1,847
  1,903
  1,961
  2,022
  2,085
  2,151
  2,219
  2,290
  2,364
  2,440
  2,520
  2,603
  2,689
  2,778
  2,871
  2,967
  3,068
  3,172
  3,281
  3,394
  3,512
  3,634
Cash from financing (excl. dividends), $m  
  2,919
  2,647
  2,560
  2,698
  2,838
  2,981
  3,128
  3,279
  3,436
  3,597
  3,763
  3,935
  4,115
  4,301
  4,494
  4,695
  4,905
  5,123
  5,350
  5,588
  5,836
  6,094
  6,363
  6,645
  6,938
  7,246
  7,567
  7,903
  8,254
  8,621
  9,005
Total cash flow (excl. dividends), $m
  65
  1,106
  1,208
  1,317
  1,427
  1,538
  1,652
  1,768
  1,887
  2,010
  2,136
  2,267
  2,403
  2,544
  2,691
  2,844
  3,003
  3,169
  3,342
  3,523
  3,712
  3,910
  4,117
  4,333
  4,560
  4,798
  5,046
  5,307
  5,580
  5,867
  6,167
Retained Cash Flow (-), $m
  -93
  -5,574
  -1,508
  -1,551
  -1,596
  -1,642
  -1,690
  -1,740
  -1,793
  -1,847
  -1,903
  -1,961
  -2,022
  -2,085
  -2,151
  -2,219
  -2,290
  -2,364
  -2,440
  -2,520
  -2,603
  -2,689
  -2,778
  -2,871
  -2,967
  -3,068
  -3,172
  -3,281
  -3,394
  -3,512
  -3,634
Prev. year cash balance distribution, $m
 
  351
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -4,117
  -300
  -234
  -169
  -104
  -39
  27
  94
  163
  233
  306
  381
  459
  540
  624
  713
  805
  902
  1,003
  1,110
  1,221
  1,339
  1,463
  1,593
  1,730
  1,874
  2,026
  2,186
  2,355
  2,533
Discount rate, %
 
  13.20
  13.86
  14.55
  15.28
  16.04
  16.85
  17.69
  18.57
  19.50
  20.48
  21.50
  22.58
  23.71
  24.89
  26.14
  27.44
  28.81
  30.25
  31.77
  33.36
  35.02
  36.77
  38.61
  40.54
  42.57
  44.70
  46.93
  49.28
  51.75
  54.33
PV of cash for distribution, $m
 
  -3,637
  -231
  -156
  -96
  -49
  -15
  9
  24
  33
  36
  36
  33
  29
  24
  19
  15
  11
  8
  5
  4
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  35.4
  25.1
  17.8
  12.6
  9.0
  6.4
  4.6
  3.3
  2.4
  1.7
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Popular, Inc. (Popular) is a financial holding company. The Company operates in two segments: Banco Popular de Puerto Rico (BPPR), which includes its Puerto Rico business, and Banco Popular North America (BPNA), which includes its the United States mainland business. The Company has operations in Puerto Rico, the United States and the Caribbean. The Company's BPPR segment provides retail, mortgage and commercial banking services through its banking subsidiary, Banco Popular de Puerto Rico, as well as auto and equipment leasing and financing, investment banking, broker-dealer and insurance services through specialized subsidiaries. The Company's BPNA segment consists of Popular North America, Inc. (PNA) functioning as the holding company for its operations in the United States. It also operates PNA's subsidiary, E-LOAN, Inc. The banking operations of BPNA in the United States mainland are based in New York, Florida and New Jersey, conducted under the name of Popular Community Bank.

FINANCIAL RATIOS  of  Popular (BPOP)

Valuation Ratios
P/E Ratio 22.9
Price to Sales 0
Price to Book 1
Price to Tangible Book
Price to Cash Flow 8.4
Price to Free Cash Flow 10.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 53.8%
Cap. Spend. - 3 Yr. Gr. Rate 20.7%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 27.8%
Total Debt to Equity 27.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 1%
Ret/ On Assets - 3 Yr. Avg. 2.3%
Return On Total Capital 3.2%
Ret/ On T. Cap. - 3 Yr. Avg. 4.1%
Return On Equity 4.2%
Return On Equity - 3 Yr. Avg. 5.4%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 26.5%
Eff/ Tax Rate - 3 Yr. Avg. -47.4%
Payout Ratio 30.4%

BPOP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BPOP stock intrinsic value calculation we used $1596 million for the last fiscal year's total revenue generated by Popular. The default revenue input number comes from 2016 income statement of Popular. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BPOP stock valuation model: a) initial revenue growth rate of 3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 13.2%, whose default value for BPOP is calculated based on our internal credit rating of Popular, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Popular.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BPOP stock the variable cost ratio is equal to 16.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1027 million in the base year in the intrinsic value calculation for BPOP stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Popular.

Corporate tax rate of 27% is the nominal tax rate for Popular. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BPOP stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BPOP are equal to 2598.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Popular operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BPOP is equal to -2413.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for Popular - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 102 million for Popular is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Popular at the current share price and the inputted number of shares is $4.9 billion.

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▶ [$$] Greece property auctions stir anger and violence   [Apr-12-18 11:00PM  Financial Times]
▶ Popular Community Bank Changes Name to Popular   [Apr-09-18 08:00AM  Business Wire]
▶ ETFs with exposure to Popular, Inc. : December 20, 2017   [Dec-20-17 11:35AM  Capital Cube]
▶ Popular posts 3Q profit   [Oct-31-17 09:19AM  Associated Press]
▶ Popular, Inc. to Host Earnings Call   [08:40AM  ACCESSWIRE]
▶ Popular Community Bank Launches Popular Private Client   [Oct-20-17 12:23PM  Business Wire]
▶ ETFs with exposure to Popular, Inc. : October 17, 2017   [Oct-17-17 09:36AM  Capital Cube]
▶ ETFs with exposure to Popular, Inc. : September 20, 2017   [Sep-20-17 05:15PM  Capital Cube]
Financial statements of BPOP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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