Intrinsic value of INVESCO - IVZ

Previous Close

$33.66

  Intrinsic Value

$45.12

stock screener

  Rating & Target

buy

+34%

  Value-price divergence*

-16%

Previous close

$33.66

 
Intrinsic value

$45.12

 
Up/down potential

+34%

 
Rating

buy

 
Value-price divergence*

-16%

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

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

We calculate the intrinsic value of IVZ 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 13.4

 

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, %
  -7.59
  3.80
  3.92
  4.03
  4.13
  4.21
  4.29
  4.36
  4.43
  4.48
  4.54
  4.58
  4.62
  4.66
  4.69
  4.73
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
Revenue, $m
  4,734
  4,914
  5,107
  5,312
  5,531
  5,764
  6,012
  6,274
  6,552
  6,845
  7,156
  7,484
  7,830
  8,195
  8,579
  8,985
  9,412
  9,862
  10,335
  10,833
  11,357
  11,908
  12,488
  13,098
  13,739
  14,413
  15,121
  15,865
  16,647
  17,469
  18,333
Variable operating expenses, $m
 
  2,783
  2,868
  2,958
  3,055
  3,158
  3,267
  3,383
  3,506
  3,635
  3,772
  3,304
  3,457
  3,618
  3,788
  3,967
  4,156
  4,354
  4,563
  4,783
  5,015
  5,258
  5,514
  5,783
  6,066
  6,364
  6,676
  7,005
  7,350
  7,713
  8,095
Fixed operating expenses, $m
 
  899
  921
  944
  968
  992
  1,017
  1,042
  1,069
  1,095
  1,123
  1,151
  1,179
  1,209
  1,239
  1,270
  1,302
  1,334
  1,368
  1,402
  1,437
  1,473
  1,510
  1,548
  1,586
  1,626
  1,667
  1,708
  1,751
  1,795
  1,840
Total operating expenses, $m
  3,558
  3,682
  3,789
  3,902
  4,023
  4,150
  4,284
  4,425
  4,575
  4,730
  4,895
  4,455
  4,636
  4,827
  5,027
  5,237
  5,458
  5,688
  5,931
  6,185
  6,452
  6,731
  7,024
  7,331
  7,652
  7,990
  8,343
  8,713
  9,101
  9,508
  9,935
Operating income, $m
  1,176
  1,232
  1,318
  1,409
  1,508
  1,614
  1,727
  1,848
  1,977
  2,115
  2,261
  3,029
  3,193
  3,368
  3,552
  3,748
  3,954
  4,173
  4,404
  4,648
  4,906
  5,177
  5,464
  5,767
  6,086
  6,423
  6,778
  7,152
  7,546
  7,961
  8,399
EBITDA, $m
  1,277
  1,908
  1,996
  2,090
  2,192
  2,301
  2,417
  2,542
  2,674
  2,816
  2,966
  3,125
  3,294
  3,473
  3,662
  3,863
  4,075
  4,299
  4,537
  4,787
  5,051
  5,330
  5,625
  5,935
  6,263
  6,608
  6,972
  7,356
  7,760
  8,185
  8,634
Interest expense (income), $m
  81
  228
  252
  278
  306
  335
  367
  400
  435
  473
  512
  554
  598
  645
  694
  746
  801
  858
  919
  982
  1,050
  1,120
  1,195
  1,273
  1,355
  1,441
  1,532
  1,627
  1,728
  1,833
  1,944
Earnings before tax, $m
  1,207
  1,005
  1,066
  1,132
  1,203
  1,279
  1,361
  1,449
  1,542
  1,642
  1,749
  2,475
  2,595
  2,723
  2,858
  3,002
  3,154
  3,315
  3,485
  3,665
  3,856
  4,057
  4,270
  4,494
  4,732
  4,982
  5,246
  5,524
  5,818
  6,128
  6,455
Tax expense, $m
  339
  271
  288
  306
  325
  345
  367
  391
  416
  443
  472
  668
  701
  735
  772
  810
  852
  895
  941
  990
  1,041
  1,095
  1,153
  1,214
  1,278
  1,345
  1,416
  1,492
  1,571
  1,655
  1,743
Net income, $m
  854
  733
  778
  826
  878
  934
  993
  1,057
  1,126
  1,199
  1,276
  1,807
  1,894
  1,988
  2,086
  2,191
  2,302
  2,420
  2,544
  2,676
  2,815
  2,962
  3,117
  3,281
  3,454
  3,637
  3,830
  4,033
  4,247
  4,474
  4,712

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,328
  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
  25,734
  25,329
  26,322
  27,383
  28,512
  29,713
  30,988
  32,340
  33,772
  35,286
  36,886
  38,576
  40,359
  42,241
  44,224
  46,314
  48,515
  50,833
  53,273
  55,840
  58,542
  61,383
  64,372
  67,514
  70,818
  74,292
  77,942
  81,779
  85,811
  90,047
  94,499
Adjusted assets (=assets-cash), $m
  24,406
  25,329
  26,322
  27,383
  28,512
  29,713
  30,988
  32,340
  33,772
  35,286
  36,886
  38,576
  40,359
  42,241
  44,224
  46,314
  48,515
  50,833
  53,273
  55,840
  58,542
  61,383
  64,372
  67,514
  70,818
  74,292
  77,942
  81,779
  85,811
  90,047
  94,499
Revenue / Adjusted assets
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
Average production assets, $m
  1,823
  1,892
  1,966
  2,045
  2,130
  2,219
  2,315
  2,415
  2,522
  2,635
  2,755
  2,881
  3,014
  3,155
  3,303
  3,459
  3,624
  3,797
  3,979
  4,171
  4,372
  4,585
  4,808
  5,043
  5,289
  5,549
  5,821
  6,108
  6,409
  6,726
  7,058
Working capital, $m
  0
  -491
  -511
  -531
  -553
  -576
  -601
  -627
  -655
  -685
  -716
  -748
  -783
  -819
  -858
  -898
  -941
  -986
  -1,033
  -1,083
  -1,136
  -1,191
  -1,249
  -1,310
  -1,374
  -1,441
  -1,512
  -1,587
  -1,665
  -1,747
  -1,833
Total debt, $m
  6,506
  7,197
  7,939
  8,731
  9,575
  10,472
  11,424
  12,434
  13,503
  14,634
  15,830
  17,092
  18,424
  19,830
  21,311
  22,872
  24,517
  26,248
  28,071
  29,989
  32,007
  34,129
  36,362
  38,709
  41,177
  43,772
  46,499
  49,365
  52,377
  55,541
  58,867
Total liabilities, $m
  18,231
  18,921
  19,663
  20,455
  21,299
  22,196
  23,148
  24,158
  25,227
  26,358
  27,554
  28,816
  30,148
  31,554
  33,035
  34,596
  36,241
  37,972
  39,795
  41,713
  43,731
  45,853
  48,086
  50,433
  52,901
  55,496
  58,223
  61,089
  64,101
  67,265
  70,591
Total equity, $m
  7,504
  6,408
  6,660
  6,928
  7,214
  7,517
  7,840
  8,182
  8,544
  8,927
  9,332
  9,760
  10,211
  10,687
  11,189
  11,717
  12,274
  12,861
  13,478
  14,128
  14,811
  15,530
  16,286
  17,081
  17,917
  18,796
  19,719
  20,690
  21,710
  22,782
  23,908
Total liabilities and equity, $m
  25,735
  25,329
  26,323
  27,383
  28,513
  29,713
  30,988
  32,340
  33,771
  35,285
  36,886
  38,576
  40,359
  42,241
  44,224
  46,313
  48,515
  50,833
  53,273
  55,841
  58,542
  61,383
  64,372
  67,514
  70,818
  74,292
  77,942
  81,779
  85,811
  90,047
  94,499
Debt-to-equity ratio
  0.867
  1.120
  1.190
  1.260
  1.330
  1.390
  1.460
  1.520
  1.580
  1.640
  1.700
  1.750
  1.800
  1.860
  1.900
  1.950
  2.000
  2.040
  2.080
  2.120
  2.160
  2.200
  2.230
  2.270
  2.300
  2.330
  2.360
  2.390
  2.410
  2.440
  2.460
Adjusted equity ratio
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  854
  733
  778
  826
  878
  934
  993
  1,057
  1,126
  1,199
  1,276
  1,807
  1,894
  1,988
  2,086
  2,191
  2,302
  2,420
  2,544
  2,676
  2,815
  2,962
  3,117
  3,281
  3,454
  3,637
  3,830
  4,033
  4,247
  4,474
  4,712
Depreciation, amort., depletion, $m
  101
  676
  678
  681
  684
  687
  690
  693
  697
  701
  705
  96
  100
  105
  110
  115
  121
  127
  133
  139
  146
  153
  160
  168
  176
  185
  194
  204
  214
  224
  235
Funds from operations, $m
  -362
  1,409
  1,456
  1,507
  1,562
  1,621
  1,684
  1,751
  1,823
  1,900
  1,981
  1,903
  1,995
  2,093
  2,197
  2,307
  2,423
  2,546
  2,677
  2,815
  2,961
  3,115
  3,277
  3,449
  3,630
  3,822
  4,024
  4,236
  4,461
  4,698
  4,947
Change in working capital, $m
  -491
  -18
  -19
  -21
  -22
  -23
  -25
  -26
  -28
  -29
  -31
  -33
  -35
  -36
  -38
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -74
  -78
  -82
  -86
Cash from operations, $m
  129
  1,427
  1,476
  1,528
  1,584
  1,644
  1,708
  1,777
  1,851
  1,929
  2,012
  1,935
  2,029
  2,129
  2,235
  2,347
  2,466
  2,591
  2,724
  2,865
  3,013
  3,170
  3,335
  3,510
  3,694
  3,889
  4,094
  4,311
  4,539
  4,780
  5,034
Maintenance CAPEX, $m
  0
  -61
  -63
  -66
  -68
  -71
  -74
  -77
  -81
  -84
  -88
  -92
  -96
  -100
  -105
  -110
  -115
  -121
  -127
  -133
  -139
  -146
  -153
  -160
  -168
  -176
  -185
  -194
  -204
  -214
  -224
New CAPEX, $m
  -148
  -69
  -74
  -79
  -84
  -90
  -95
  -101
  -107
  -113
  -120
  -126
  -133
  -141
  -148
  -156
  -164
  -173
  -182
  -192
  -202
  -212
  -223
  -235
  -247
  -259
  -273
  -287
  -301
  -316
  -332
Cash from investing activities, $m
  -991
  -130
  -137
  -145
  -152
  -161
  -169
  -178
  -188
  -197
  -208
  -218
  -229
  -241
  -253
  -266
  -279
  -294
  -309
  -325
  -341
  -358
  -376
  -395
  -415
  -435
  -458
  -481
  -505
  -530
  -556
Free cash flow, $m
  -862
  1,297
  1,338
  1,383
  1,431
  1,483
  1,539
  1,599
  1,663
  1,732
  1,805
  1,717
  1,800
  1,888
  1,982
  2,081
  2,186
  2,297
  2,415
  2,540
  2,672
  2,812
  2,959
  3,115
  3,280
  3,453
  3,637
  3,830
  4,034
  4,250
  4,477
Issuance/(repayment) of debt, $m
  29
  691
  742
  792
  844
  897
  953
  1,010
  1,069
  1,131
  1,195
  1,262
  1,332
  1,405
  1,481
  1,561
  1,644
  1,731
  1,823
  1,918
  2,018
  2,123
  2,232
  2,347
  2,468
  2,594
  2,727
  2,866
  3,012
  3,165
  3,325
Issuance/(repurchase) of shares, $m
  -535
  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  
  930
  691
  742
  792
  844
  897
  953
  1,010
  1,069
  1,131
  1,195
  1,262
  1,332
  1,405
  1,481
  1,561
  1,644
  1,731
  1,823
  1,918
  2,018
  2,123
  2,232
  2,347
  2,468
  2,594
  2,727
  2,866
  3,012
  3,165
  3,325
Total cash flow (excl. dividends), $m
  -63
  1,988
  2,080
  2,175
  2,275
  2,380
  2,492
  2,609
  2,732
  2,863
  3,000
  2,980
  3,132
  3,293
  3,463
  3,642
  3,830
  4,029
  4,238
  4,458
  4,690
  4,934
  5,192
  5,463
  5,748
  6,048
  6,364
  6,696
  7,046
  7,415
  7,802
Retained Cash Flow (-), $m
  381
  -232
  -251
  -268
  -286
  -304
  -323
  -342
  -362
  -383
  -405
  -428
  -451
  -476
  -502
  -529
  -557
  -586
  -617
  -650
  -683
  -719
  -756
  -795
  -836
  -879
  -924
  -971
  -1,020
  -1,072
  -1,126
Prev. year cash balance distribution, $m
 
  1,328
  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
 
  3,084
  1,829
  1,907
  1,989
  2,076
  2,169
  2,267
  2,370
  2,480
  2,595
  2,552
  2,681
  2,818
  2,961
  3,113
  3,273
  3,442
  3,621
  3,809
  4,007
  4,216
  4,436
  4,667
  4,912
  5,169
  5,440
  5,726
  6,026
  6,343
  6,676
Discount rate, %
 
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
 
  2,866
  1,569
  1,498
  1,420
  1,335
  1,245
  1,150
  1,051
  952
  851
  707
  619
  534
  454
  380
  313
  253
  201
  157
  119
  89
  65
  46
  32
  22
  14
  9
  6
  3
  2
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

Invesco Ltd. is a publicly owned investment manager. The firm provides its services to retail clients, institutional clients, high-net worth clients, public entities, corporations, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions, and sovereign wealth funds. It manages separate client-focused equity and fixed income portfolios. The firm also launches equity, fixed income, commodity, multi-asset, and balanced mutual funds for its clients. It launches equity, fixed income, multi-asset, and balanced exchange-traded funds. The firm also launches and manages private funds. It invests in the public equity and fixed income markets across the globe. The firm also invests in alternative markets, such as commodities and currencies. For the equity portion of its portfolio, it invests in growth and value stocks of large-cap, mid-cap, and small-cap companies. For the fixed income portion of its portfolio, the firm invests in convertibles, government bonds, municipal bonds, treasury securities, and cash. It also invests in short term and intermediate term bonds, investment grade and high yield bonds, taxable and tax-free bonds, senior secured loans, and structured securities such as asset-backed securities, mortgage-backed securities, and commercial mortgage-backed securities. The firm employs absolute return, global macro, and long/short strategies. It employs quantitative analysis to make its investments. The firm was formerly known as Invesco Plc, AMVESCAP plc, Amvesco plc, Invesco PLC, Invesco MIM, and H. Lotery & Co. Ltd. Invesco Ltd. was founded in December 1935 and is based in Atlanta, Georgia with an additional office in Hamilton, Bermuda.

FINANCIAL RATIOS  of  INVESCO (IVZ)

Valuation Ratios
P/E Ratio 15.9
Price to Sales 2.9
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 105.4
Price to Free Cash Flow -715.4
Growth Rates
Sales Growth Rate -7.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 18.4%
Cap. Spend. - 3 Yr. Gr. Rate 11%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 86.7%
Total Debt to Equity 86.7%
Interest Coverage 16
Management Effectiveness
Return On Assets 3.6%
Ret/ On Assets - 3 Yr. Avg. 4.4%
Return On Total Capital 5.8%
Ret/ On T. Cap. - 3 Yr. Avg. 6.3%
Return On Equity 11.1%
Return On Equity - 3 Yr. Avg. 11.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 70.3%
Gross Margin - 3 Yr. Avg. 69.2%
EBITDA Margin 29.3%
EBITDA Margin - 3 Yr. Avg. 29.7%
Operating Margin 24.8%
Oper. Margin - 3 Yr. Avg. 25.3%
Pre-Tax Margin 25.5%
Pre-Tax Margin - 3 Yr. Avg. 26.4%
Net Profit Margin 18%
Net Profit Margin - 3 Yr. Avg. 18.7%
Effective Tax Rate 28.1%
Eff/ Tax Rate - 3 Yr. Avg. 28.4%
Payout Ratio 53.9%

IVZ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IVZ stock intrinsic value calculation we used $4734 million for the last fiscal year's total revenue generated by INVESCO. The default revenue input number comes from 2016 income statement of INVESCO. 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 IVZ stock valuation model: a) initial revenue growth rate of 3.8% 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 7.6%, whose default value for IVZ is calculated based on our internal credit rating of INVESCO, 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 INVESCO.
    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 IVZ stock the variable cost ratio is equal to 57.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $877 million in the base year in the intrinsic value calculation for IVZ 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 3.5% for INVESCO.

Corporate tax rate of 27% is the nominal tax rate for INVESCO. 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 IVZ 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 IVZ are equal to 38.5%.

Life of production assets of 79 years is the average useful life of capital assets used in INVESCO 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 IVZ is equal to -10%. 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 - $7504 million for INVESCO - 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 398.151 million for INVESCO 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 INVESCO at the current share price and the inputted number of shares is $13.4 billion.

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COMPANY NEWS

▶ Invesco: Stay Positive, Net Flows Are Good   [Aug-10-17 09:58AM  Barrons.com]
▶ [$$] Guggenheim Funds Are Worth the Price For Invesco   [12:05AM  The Wall Street Journal]
▶ Invesco May Buy Guggenheim ETFs and Mutual Funds   [Aug-03-17 03:00PM  Bloomberg Video]
▶ Invesco in Talks to Buy Guggenheim Funds   [07:39AM  Barrons.com]
▶ Invesco Closed-End Funds Declare Dividends   [Aug-01-17 12:25PM  PR Newswire]
▶ [$$] Asset Managers: Spending Money to Make Money   [12:42AM  The Wall Street Journal]
▶ [$$] Asset Managers: Spending Money to Make Money   [Jul-30-17 11:24AM  The Wall Street Journal]
▶ Invesco beats 2Q profit forecasts   [Jul-27-17 10:34PM  Associated Press]
▶ Invesco Takes a Tumble   [12:44PM  Barrons.com]
▶ The Real Estate Rush   [04:54AM  Bloomberg]
▶ Invesco Ltd. To Announce Second Quarter 2017 Results   [Jul-11-17 04:15PM  PR Newswire]
▶ Invesco Closed-End Funds Declare Dividends   [Jul-03-17 12:00PM  PR Newswire]
▶ Financial Name Yields 3.4%; Turnaround Story Intact?   [Jun-19-17 01:55PM  Investor's Business Daily]
▶ Rowing Upstream For Alpha   [Jun-13-17 09:45AM  Forbes]
▶ [$$] Theresa May and the great Qatar conundrum   [11:53AM  Financial Times]
▶ Invesco streamlines and simplifies its mutual fund suite   [May-25-17 02:45PM  PR Newswire]
▶ What ETF Providers May Do About Rising Index Fees   [May-24-17 12:50PM  Barrons.com]
▶ [$$] Invesco thrust into Europe's ferocious ETF war   [May-07-17 12:02AM  Financial Times]
▶ ETFs with exposure to Invesco Ltd. : May 2, 2017   [May-02-17 04:12PM  Capital Cube]
▶ Invesco Closed-End Funds Declare Dividends   [May-01-17 12:00PM  PR Newswire]
▶ An ETF To Help Avoid Value Traps   [08:18AM  Benzinga]
▶ Invesco Buys Fast Growing European ETF Provider   [Apr-28-17 10:02AM  Barrons.com]
▶ Legg Mason: "Positive But Volatile"   [Apr-27-17 12:39PM  Barrons.com]
▶ Invesco to Acquire ETF Specialist Source   [09:36AM  Barrons.com]
▶ Invesco tops 1Q profit forecasts   [07:10AM  Associated Press]
Stock chart of IVZ Financial statements of IVZ
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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