Intrinsic value of Dana - DAN

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$20.57

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$20.57

 
Intrinsic value

$208.82

 
Up/down potential

+915%

 
Rating

str. buy

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DAN 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

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.0

 

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, %
  -3.86
  17.40
  16.16
  15.04
  14.04
  13.14
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
Revenue, $m
  5,826
  6,840
  7,945
  9,140
  10,424
  11,793
  13,246
  14,781
  16,397
  18,092
  19,865
  21,718
  23,649
  25,659
  27,751
  29,926
  32,186
  34,535
  36,976
  39,513
  42,150
  44,893
  47,747
  50,717
  53,811
  57,033
  60,393
  63,896
  67,552
  71,368
  75,353
Variable operating expenses, $m
 
  4,205
  4,883
  5,616
  6,403
  7,243
  8,135
  9,076
  10,068
  11,107
  12,196
  13,323
  14,507
  15,741
  17,024
  18,358
  19,745
  21,186
  22,683
  24,239
  25,857
  27,540
  29,291
  31,113
  33,010
  34,987
  37,048
  39,198
  41,440
  43,781
  46,226
Fixed operating expenses, $m
 
  2,023
  2,074
  2,126
  2,179
  2,233
  2,289
  2,346
  2,405
  2,465
  2,527
  2,590
  2,655
  2,721
  2,789
  2,859
  2,930
  3,004
  3,079
  3,156
  3,235
  3,315
  3,398
  3,483
  3,570
  3,660
  3,751
  3,845
  3,941
  4,040
  4,141
Total operating expenses, $m
  5,511
  6,228
  6,957
  7,742
  8,582
  9,476
  10,424
  11,422
  12,473
  13,572
  14,723
  15,913
  17,162
  18,462
  19,813
  21,217
  22,675
  24,190
  25,762
  27,395
  29,092
  30,855
  32,689
  34,596
  36,580
  38,647
  40,799
  43,043
  45,381
  47,821
  50,367
Operating income, $m
  315
  612
  988
  1,398
  1,841
  2,316
  2,822
  3,358
  3,924
  4,519
  5,143
  5,805
  6,486
  7,197
  7,938
  8,709
  9,511
  10,346
  11,214
  12,118
  13,058
  14,038
  15,058
  16,121
  17,230
  18,386
  19,593
  20,854
  22,171
  23,547
  24,987
EBITDA, $m
  497
  823
  1,233
  1,678
  2,159
  2,674
  3,223
  3,805
  4,419
  5,064
  5,741
  6,448
  7,187
  7,958
  8,760
  9,595
  10,465
  11,369
  12,310
  13,288
  14,307
  15,368
  16,473
  17,624
  18,824
  20,076
  21,383
  22,747
  24,172
  25,662
  27,219
Interest expense (income), $m
  111
  110
  154
  201
  253
  308
  367
  429
  495
  565
  638
  714
  794
  877
  963
  1,053
  1,147
  1,244
  1,345
  1,450
  1,559
  1,673
  1,791
  1,913
  2,041
  2,174
  2,313
  2,457
  2,608
  2,765
  2,930
Earnings before tax, $m
  215
  501
  835
  1,197
  1,589
  2,008
  2,455
  2,929
  3,429
  3,954
  4,505
  5,091
  5,693
  6,321
  6,975
  7,656
  8,364
  9,102
  9,869
  10,668
  11,499
  12,365
  13,267
  14,208
  15,189
  16,212
  17,280
  18,396
  19,563
  20,782
  22,057
Tax expense, $m
  -424
  135
  225
  323
  429
  542
  663
  791
  926
  1,068
  1,216
  1,375
  1,537
  1,707
  1,883
  2,067
  2,258
  2,457
  2,665
  2,880
  3,105
  3,339
  3,582
  3,836
  4,101
  4,377
  4,666
  4,967
  5,282
  5,611
  5,955
Net income, $m
  640
  366
  609
  874
  1,160
  1,466
  1,792
  2,138
  2,503
  2,887
  3,289
  3,716
  4,156
  4,614
  5,091
  5,589
  6,106
  6,644
  7,204
  7,787
  8,394
  9,027
  9,685
  10,372
  11,088
  11,835
  12,615
  13,429
  14,281
  15,171
  16,102

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  737
  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
  4,860
  4,841
  5,623
  6,469
  7,377
  8,346
  9,374
  10,461
  11,604
  12,804
  14,059
  15,370
  16,736
  18,159
  19,640
  21,179
  22,779
  24,441
  26,168
  27,964
  29,830
  31,772
  33,791
  35,893
  38,083
  40,363
  42,741
  45,220
  47,807
  50,508
  53,328
Adjusted assets (=assets-cash), $m
  4,123
  4,841
  5,623
  6,469
  7,377
  8,346
  9,374
  10,461
  11,604
  12,804
  14,059
  15,370
  16,736
  18,159
  19,640
  21,179
  22,779
  24,441
  26,168
  27,964
  29,830
  31,772
  33,791
  35,893
  38,083
  40,363
  42,741
  45,220
  47,807
  50,508
  53,328
Revenue / Adjusted assets
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
  1.413
Average production assets, $m
  1,396
  1,642
  1,907
  2,194
  2,502
  2,830
  3,179
  3,547
  3,935
  4,342
  4,768
  5,212
  5,676
  6,158
  6,660
  7,182
  7,725
  8,288
  8,874
  9,483
  10,116
  10,774
  11,459
  12,172
  12,915
  13,688
  14,494
  15,335
  16,212
  17,128
  18,085
Working capital, $m
  1,031
  424
  493
  567
  646
  731
  821
  916
  1,017
  1,122
  1,232
  1,346
  1,466
  1,591
  1,721
  1,855
  1,996
  2,141
  2,293
  2,450
  2,613
  2,783
  2,960
  3,144
  3,336
  3,536
  3,744
  3,962
  4,188
  4,425
  4,672
Total debt, $m
  1,664
  2,226
  2,915
  3,660
  4,460
  5,314
  6,220
  7,177
  8,184
  9,241
  10,347
  11,502
  12,706
  13,959
  15,264
  16,620
  18,029
  19,493
  21,015
  22,597
  24,242
  25,952
  27,731
  29,583
  31,512
  33,521
  35,616
  37,800
  40,079
  42,459
  44,943
Total liabilities, $m
  3,703
  4,265
  4,954
  5,699
  6,499
  7,353
  8,259
  9,216
  10,223
  11,280
  12,386
  13,541
  14,745
  15,998
  17,303
  18,659
  20,068
  21,532
  23,054
  24,636
  26,281
  27,991
  29,770
  31,622
  33,551
  35,560
  37,655
  39,839
  42,118
  44,498
  46,982
Total equity, $m
  1,157
  576
  669
  770
  878
  993
  1,116
  1,245
  1,381
  1,524
  1,673
  1,829
  1,992
  2,161
  2,337
  2,520
  2,711
  2,908
  3,114
  3,328
  3,550
  3,781
  4,021
  4,271
  4,532
  4,803
  5,086
  5,381
  5,689
  6,010
  6,346
Total liabilities and equity, $m
  4,860
  4,841
  5,623
  6,469
  7,377
  8,346
  9,375
  10,461
  11,604
  12,804
  14,059
  15,370
  16,737
  18,159
  19,640
  21,179
  22,779
  24,440
  26,168
  27,964
  29,831
  31,772
  33,791
  35,893
  38,083
  40,363
  42,741
  45,220
  47,807
  50,508
  53,328
Debt-to-equity ratio
  1.438
  3.860
  4.360
  4.750
  5.080
  5.350
  5.580
  5.770
  5.930
  6.070
  6.180
  6.290
  6.380
  6.460
  6.530
  6.590
  6.650
  6.700
  6.750
  6.790
  6.830
  6.860
  6.900
  6.930
  6.950
  6.980
  7.000
  7.020
  7.040
  7.060
  7.080
Adjusted equity ratio
  0.102
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  640
  366
  609
  874
  1,160
  1,466
  1,792
  2,138
  2,503
  2,887
  3,289
  3,716
  4,156
  4,614
  5,091
  5,589
  6,106
  6,644
  7,204
  7,787
  8,394
  9,027
  9,685
  10,372
  11,088
  11,835
  12,615
  13,429
  14,281
  15,171
  16,102
Depreciation, amort., depletion, $m
  182
  212
  244
  280
  318
  358
  401
  447
  495
  545
  598
  643
  701
  760
  822
  887
  954
  1,023
  1,096
  1,171
  1,249
  1,330
  1,415
  1,503
  1,594
  1,690
  1,789
  1,893
  2,002
  2,115
  2,233
Funds from operations, $m
  313
  578
  854
  1,154
  1,478
  1,824
  2,194
  2,585
  2,998
  3,432
  3,887
  4,360
  4,856
  5,374
  5,914
  6,475
  7,060
  7,667
  8,300
  8,958
  9,643
  10,357
  11,100
  11,874
  12,682
  13,525
  14,404
  15,323
  16,282
  17,285
  18,334
Change in working capital, $m
  -71
  63
  69
  74
  80
  85
  90
  95
  100
  105
  110
  115
  120
  125
  130
  135
  140
  146
  151
  157
  164
  170
  177
  184
  192
  200
  208
  217
  227
  237
  247
Cash from operations, $m
  384
  641
  785
  1,080
  1,398
  1,740
  2,104
  2,490
  2,898
  3,327
  3,777
  4,245
  4,737
  5,250
  5,784
  6,340
  6,919
  7,522
  8,149
  8,801
  9,480
  10,187
  10,923
  11,690
  12,490
  13,325
  14,196
  15,105
  16,056
  17,049
  18,087
Maintenance CAPEX, $m
  0
  -172
  -203
  -235
  -271
  -309
  -349
  -392
  -438
  -486
  -536
  -589
  -643
  -701
  -760
  -822
  -887
  -954
  -1,023
  -1,096
  -1,171
  -1,249
  -1,330
  -1,415
  -1,503
  -1,594
  -1,690
  -1,789
  -1,893
  -2,002
  -2,115
New CAPEX, $m
  -322
  -246
  -265
  -287
  -308
  -329
  -349
  -368
  -388
  -407
  -426
  -445
  -463
  -483
  -502
  -522
  -542
  -564
  -586
  -609
  -633
  -658
  -685
  -713
  -742
  -773
  -806
  -841
  -877
  -916
  -956
Cash from investing activities, $m
  -365
  -418
  -468
  -522
  -579
  -638
  -698
  -760
  -826
  -893
  -962
  -1,034
  -1,106
  -1,184
  -1,262
  -1,344
  -1,429
  -1,518
  -1,609
  -1,705
  -1,804
  -1,907
  -2,015
  -2,128
  -2,245
  -2,367
  -2,496
  -2,630
  -2,770
  -2,918
  -3,071
Free cash flow, $m
  19
  223
  317
  557
  819
  1,102
  1,406
  1,729
  2,072
  2,434
  2,815
  3,212
  3,630
  4,066
  4,522
  4,996
  5,490
  6,004
  6,540
  7,096
  7,676
  8,279
  8,908
  9,563
  10,245
  10,957
  11,700
  12,475
  13,285
  14,131
  15,016
Issuance/(repayment) of debt, $m
  68
  631
  689
  745
  800
  854
  906
  957
  1,007
  1,057
  1,106
  1,155
  1,204
  1,254
  1,304
  1,356
  1,409
  1,465
  1,522
  1,582
  1,644
  1,710
  1,779
  1,852
  1,929
  2,009
  2,095
  2,184
  2,279
  2,379
  2,485
Issuance/(repurchase) of shares, $m
  -81
  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 from financing (excl. dividends), $m  
  -53
  631
  689
  745
  800
  854
  906
  957
  1,007
  1,057
  1,106
  1,155
  1,204
  1,254
  1,304
  1,356
  1,409
  1,465
  1,522
  1,582
  1,644
  1,710
  1,779
  1,852
  1,929
  2,009
  2,095
  2,184
  2,279
  2,379
  2,485
Total cash flow (excl. dividends), $m
  -49
  854
  1,006
  1,303
  1,619
  1,956
  2,312
  2,686
  3,079
  3,491
  3,921
  4,367
  4,834
  5,320
  5,826
  6,352
  6,900
  7,469
  8,061
  8,678
  9,320
  9,990
  10,687
  11,415
  12,174
  12,966
  13,794
  14,660
  15,564
  16,511
  17,501
Retained Cash Flow (-), $m
  -429
  -87
  -93
  -101
  -108
  -115
  -122
  -129
  -136
  -143
  -149
  -156
  -163
  -169
  -176
  -183
  -190
  -198
  -206
  -214
  -222
  -231
  -240
  -250
  -261
  -271
  -283
  -295
  -308
  -321
  -336
Prev. year cash balance distribution, $m
 
  668
  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
 
  1,435
  913
  1,202
  1,511
  1,840
  2,189
  2,557
  2,943
  3,348
  3,771
  4,211
  4,671
  5,151
  5,650
  6,169
  6,709
  7,271
  7,856
  8,465
  9,098
  9,759
  10,447
  11,165
  11,913
  12,695
  13,511
  14,364
  15,256
  16,189
  17,165
Discount rate, %
 
  5.10
  5.36
  5.62
  5.90
  6.20
  6.51
  6.83
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.27
  12.89
  13.53
  14.21
  14.92
  15.66
  16.45
  17.27
  18.13
  19.04
  19.99
  20.99
PV of cash for distribution, $m
 
  1,365
  823
  1,020
  1,201
  1,362
  1,500
  1,610
  1,691
  1,741
  1,761
  1,750
  1,712
  1,649
  1,562
  1,457
  1,338
  1,209
  1,074
  938
  805
  679
  562
  456
  362
  282
  215
  160
  116
  82
  56
Current shareholders' claim on cash, %
  100
  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
  100.0

Dana Incorporated manufactures and sells driveline, sealing, and thermal-management products for vehicle manufacturers in North America, Europe, South America, and the Asia Pacific. The company operates in four segments: Light Vehicle Driveline Technologies, Commercial Vehicle Driveline Technologies, Off-Highway Driveline Technologies, and Power Technologies. The Light Vehicle Driveline Technologies segment offers front axles, rear axles, driveshafts/propshafts, differentials, torque couplings, and modular assemblies for use in light trucks, sport utility vehicles, crossover utility vehicles, vans, and passenger cars. The Commercial Vehicle Driveline Technologies segment provides Steer and drive axles, driveshafts, and tire inflation systems for medium and heavy duty trucks, buses, and specialty vehicles. The Off-Highway Driveline Technologies segment manufactures front and rear axles, driveshafts, transmissions, torque converters, tire inflation systems, and electronic controls for use in construction, earth moving, agricultural, mining, forestry, rail, and material handling applications. The Power Technologies segment offers gaskets, cover modules, heat shields, engine sealing systems, cooling products, and heat transfer products for light vehicle, medium/heavy vehicle, and off-highway markets. The company was formerly known as Dana Holding Corporation and changed its name to Dana Incorporated in August 2016. Dana Incorporated was founded in 1904 and is headquartered in Maumee, Ohio.

FINANCIAL RATIOS  of  Dana (DAN)

Valuation Ratios
P/E Ratio 4.6
Price to Sales 0.5
Price to Book 2.6
Price to Tangible Book
Price to Cash Flow 7.7
Price to Free Cash Flow 47.8
Growth Rates
Sales Growth Rate -3.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 23.8%
Cap. Spend. - 3 Yr. Gr. Rate 9%
Financial Strength
Quick Ratio 11
Current Ratio 0
LT Debt to Equity 137.9%
Total Debt to Equity 143.8%
Interest Coverage 3
Management Effectiveness
Return On Assets 21.2%
Ret/ On Assets - 3 Yr. Avg. 11.9%
Return On Total Capital 25%
Ret/ On T. Cap. - 3 Yr. Avg. 14.2%
Return On Equity 67.9%
Return On Equity - 3 Yr. Avg. 37.4%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 14.5%
Gross Margin - 3 Yr. Avg. 14.3%
EBITDA Margin 8.7%
EBITDA Margin - 3 Yr. Avg. 9%
Operating Margin 5.4%
Oper. Margin - 3 Yr. Avg. 5.9%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 11%
Net Profit Margin - 3 Yr. Avg. 6.1%
Effective Tax Rate -197.2%
Eff/ Tax Rate - 3 Yr. Avg. -65.4%
Payout Ratio 5.5%

DAN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DAN stock intrinsic value calculation we used $5826 million for the last fiscal year's total revenue generated by Dana. The default revenue input number comes from 2016 income statement of Dana. 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 DAN stock valuation model: a) initial revenue growth rate of 17.4% 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 5.1%, whose default value for DAN is calculated based on our internal credit rating of Dana, 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 Dana.
    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 DAN stock the variable cost ratio is equal to 61.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1974 million in the base year in the intrinsic value calculation for DAN 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 6.9% for Dana.

Corporate tax rate of 27% is the nominal tax rate for Dana. 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 DAN 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 DAN are equal to 24%.

Life of production assets of 8.1 years is the average useful life of capital assets used in Dana 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 DAN is equal to 6.2%. 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 - $1157 million for Dana - 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 146.726 million for Dana 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 Dana at the current share price and the inputted number of shares is $3.0 billion.


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COMPANY NEWS

▶ ETFs with exposure to Dana, Inc. : May 19, 2017   [May-19-17 01:48PM  Capital Cube]
▶ Dana Named Innovation Supplier of the Year by FCA   [May-15-17 01:58PM  PR Newswire]
▶ ETFs with exposure to Dana, Inc. : May 4, 2017   [May-04-17 03:53PM  Capital Cube]
▶ Dana tops Street 1Q forecasts   [May-02-17 07:19AM  Associated Press]
▶ Dana, Inc. Value Analysis (NYSE:DAN) : April 27, 2017   [Apr-27-17 04:43PM  Capital Cube]
▶ Dana to Pay Dividend on Common Stock   [04:30PM  PR Newswire]
▶ Dana Completes $400 Million in Senior Notes Offering   [Apr-04-17 11:50AM  PR Newswire]
▶ Dana to Pay Dividend on Common Stock   [04:30PM  PR Newswire]
▶ Dana Recognized as a Top Workplace   [Jan-30-17 02:00PM  PR Newswire]
▶ [$$] Magna International Shares: Priced to Move   [Jan-28-17 12:01AM  at Barrons.com]
▶ EU mergers and takeovers (Dec 21)   [Dec-21-16 03:00AM  Reuters]
▶ [$$] High School Dropout Rose From Factory Floor to CEO of Dana   [Dec-02-16 07:50PM  at The Wall Street Journal]
▶ [$$] High School Dropout Rose From Factory Floor to CEO of Dana   [10:00AM  at The Wall Street Journal]
▶ Hedge Funds Are Crazy About Ebix Inc (EBIX)   [05:44AM  at Insider Monkey]
▶ Should You Avoid Dana Inc (DAN)?   [Dec-01-16 06:04AM  at Insider Monkey]
▶ EU mergers and takeovers (Nov 25)   [Nov-25-16 08:23AM  Reuters]
Stock chart of DAN Financial statements of DAN Annual reports of DAN
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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