Intrinsic value of Allstate - ALL

Previous Close

$100.02

  Intrinsic Value

$91.01

stock screener

  Rating & Target

hold

-9%

Previous close

$100.02

 
Intrinsic value

$91.01

 
Up/down potential

-9%

 
Rating

hold

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

We calculate the intrinsic value of ALL 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 2017), $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 36.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.50
  5.45
  5.40
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
  5.10
  5.09
  5.08
  5.08
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.04
  5.03
  5.03
  5.03
  5.02
Revenue, $m
  40,643
  42,858
  45,174
  47,598
  50,134
  52,788
  55,568
  58,479
  61,529
  64,725
  68,074
  71,585
  75,265
  79,124
  83,170
  87,415
  91,866
  96,536
  101,435
  106,576
  111,969
  117,629
  123,568
  129,802
  136,343
  143,210
  150,416
  157,981
  165,921
  174,256
Variable operating expenses, $m
  6,543
  6,900
  7,273
  7,663
  8,072
  8,499
  8,946
  9,415
  9,906
  10,421
  10,960
  11,525
  12,118
  12,739
  13,390
  14,074
  14,790
  15,542
  16,331
  17,159
  18,027
  18,938
  19,895
  20,898
  21,951
  23,057
  24,217
  25,435
  26,713
  28,055
Fixed operating expenses, $m
  24,553
  25,093
  25,645
  26,209
  26,786
  27,375
  27,977
  28,593
  29,222
  29,864
  30,521
  31,193
  31,879
  32,581
  33,297
  34,030
  34,778
  35,544
  36,326
  37,125
  37,941
  38,776
  39,629
  40,501
  41,392
  42,303
  43,233
  44,185
  45,157
  46,150
Total operating expenses, $m
  31,096
  31,993
  32,918
  33,872
  34,858
  35,874
  36,923
  38,008
  39,128
  40,285
  41,481
  42,718
  43,997
  45,320
  46,687
  48,104
  49,568
  51,086
  52,657
  54,284
  55,968
  57,714
  59,524
  61,399
  63,343
  65,360
  67,450
  69,620
  71,870
  74,205
Operating income, $m
  9,547
  10,865
  12,257
  13,726
  15,277
  16,915
  18,645
  20,472
  22,401
  24,440
  26,593
  28,866
  31,268
  33,804
  36,483
  39,311
  42,297
  45,450
  48,779
  52,292
  56,001
  59,915
  64,045
  68,402
  73,000
  77,850
  82,966
  88,361
  94,051
  100,051
EBITDA, $m
  21,207
  23,161
  25,217
  27,381
  29,660
  32,060
  34,587
  37,249
  40,054
  43,009
  46,123
  49,404
  52,861
  56,505
  60,344
  64,390
  68,654
  73,146
  77,881
  82,869
  88,125
  93,662
  99,496
  105,642
  112,117
  118,937
  126,120
  133,686
  141,654
  150,045
Interest expense (income), $m
  287
  4,471
  4,419
  4,473
  4,530
  4,589
  4,651
  4,716
  4,784
  4,856
  4,931
  5,009
  5,091
  5,177
  5,267
  5,362
  5,461
  5,565
  5,675
  5,789
  5,909
  6,035
  6,167
  6,306
  6,452
  6,605
  6,765
  6,934
  7,110
  7,296
  7,490
Earnings before tax, $m
  5,075
  6,447
  7,784
  9,196
  10,688
  12,263
  13,928
  15,687
  17,546
  19,509
  21,584
  23,775
  26,091
  28,537
  31,121
  33,850
  36,732
  39,776
  42,990
  46,383
  49,966
  53,747
  57,738
  61,951
  66,395
  71,085
  76,032
  81,251
  86,756
  92,561
Tax expense, $m
  1,370
  1,741
  2,102
  2,483
  2,886
  3,311
  3,761
  4,236
  4,737
  5,267
  5,828
  6,419
  7,045
  7,705
  8,403
  9,139
  9,918
  10,739
  11,607
  12,523
  13,491
  14,512
  15,589
  16,727
  17,927
  19,193
  20,529
  21,938
  23,424
  24,991
Net income, $m
  3,705
  4,706
  5,682
  6,713
  7,802
  8,952
  10,168
  11,452
  12,808
  14,242
  15,756
  17,356
  19,046
  20,832
  22,718
  24,710
  26,814
  29,036
  31,382
  33,860
  36,475
  39,235
  42,149
  45,224
  48,469
  51,892
  55,504
  59,313
  63,332
  67,569

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
Total assets, $m
  20,506
  21,624
  22,792
  24,015
  25,295
  26,634
  28,036
  29,505
  31,044
  32,656
  34,346
  36,117
  37,974
  39,921
  41,963
  44,104
  46,350
  48,706
  51,178
  53,772
  56,493
  59,349
  62,345
  65,490
  68,791
  72,255
  75,891
  79,708
  83,714
  87,919
Adjusted assets (=assets-cash), $m
  20,506
  21,624
  22,792
  24,015
  25,295
  26,634
  28,036
  29,505
  31,044
  32,656
  34,346
  36,117
  37,974
  39,921
  41,963
  44,104
  46,350
  48,706
  51,178
  53,772
  56,493
  59,349
  62,345
  65,490
  68,791
  72,255
  75,891
  79,708
  83,714
  87,919
Revenue / Adjusted assets
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
  1.982
Average production assets, $m
  116,604
  122,959
  129,605
  136,558
  143,834
  151,450
  159,425
  167,777
  176,527
  185,696
  195,304
  205,376
  215,935
  227,006
  238,616
  250,792
  263,564
  276,962
  291,018
  305,766
  321,240
  337,478
  354,518
  372,401
  391,169
  410,868
  431,544
  453,247
  476,028
  499,941
Working capital, $m
  -92,503
  -97,544
  -102,817
  -108,332
  -114,104
  -120,146
  -126,473
  -133,099
  -140,041
  -147,314
  -154,936
  -162,926
  -171,303
  -180,086
  -189,296
  -198,956
  -209,088
  -219,716
  -230,867
  -242,566
  -254,842
  -267,724
  -281,242
  -295,428
  -310,318
  -325,945
  -342,347
  -359,564
  -377,637
  -396,607
Total debt, $m
  81,824
  82,830
  83,882
  84,982
  86,134
  87,340
  88,602
  89,924
  91,309
  92,760
  94,281
  95,875
  97,546
  99,298
  101,136
  103,063
  105,084
  107,205
  109,429
  111,764
  114,213
  116,783
  119,480
  122,310
  125,281
  128,399
  131,671
  135,106
  138,712
  142,496
Total liabilities, $m
  18,455
  19,461
  20,513
  21,613
  22,765
  23,971
  25,233
  26,555
  27,940
  29,391
  30,912
  32,506
  34,177
  35,929
  37,767
  39,694
  41,715
  43,836
  46,060
  48,395
  50,844
  53,414
  56,111
  58,941
  61,912
  65,030
  68,302
  71,737
  75,343
  79,127
Total equity, $m
  2,051
  2,162
  2,279
  2,401
  2,529
  2,663
  2,804
  2,951
  3,104
  3,266
  3,435
  3,612
  3,797
  3,992
  4,196
  4,410
  4,635
  4,871
  5,118
  5,377
  5,649
  5,935
  6,235
  6,549
  6,879
  7,226
  7,589
  7,971
  8,371
  8,792
Total liabilities and equity, $m
  20,506
  21,623
  22,792
  24,014
  25,294
  26,634
  28,037
  29,506
  31,044
  32,657
  34,347
  36,118
  37,974
  39,921
  41,963
  44,104
  46,350
  48,707
  51,178
  53,772
  56,493
  59,349
  62,346
  65,490
  68,791
  72,256
  75,891
  79,708
  83,714
  87,919
Debt-to-equity ratio
  39.900
  38.310
  36.800
  35.390
  34.050
  32.790
  31.600
  30.480
  29.410
  28.400
  27.450
  26.550
  25.690
  24.870
  24.100
  23.370
  22.670
  22.010
  21.380
  20.780
  20.220
  19.680
  19.160
  18.680
  18.210
  17.770
  17.350
  16.950
  16.570
  16.210
Adjusted equity ratio
  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
  3,705
  4,706
  5,682
  6,713
  7,802
  8,952
  10,168
  11,452
  12,808
  14,242
  15,756
  17,356
  19,046
  20,832
  22,718
  24,710
  26,814
  29,036
  31,382
  33,860
  36,475
  39,235
  42,149
  45,224
  48,469
  51,892
  55,504
  59,313
  63,332
  67,569
Depreciation, amort., depletion, $m
  11,660
  12,296
  12,961
  13,656
  14,383
  15,145
  15,942
  16,778
  17,653
  18,570
  19,530
  20,538
  21,593
  22,701
  23,862
  25,079
  26,356
  27,696
  29,102
  30,577
  32,124
  33,748
  35,452
  37,240
  39,117
  41,087
  43,154
  45,325
  47,603
  49,994
Funds from operations, $m
  15,365
  17,002
  18,643
  20,369
  22,185
  24,097
  26,110
  28,229
  30,461
  32,811
  35,286
  37,894
  40,640
  43,532
  46,580
  49,789
  53,171
  56,732
  60,484
  64,436
  68,599
  72,983
  77,601
  82,464
  87,585
  92,979
  98,658
  104,638
  110,934
  117,563
Change in working capital, $m
  -4,822
  -5,041
  -5,272
  -5,516
  -5,772
  -6,042
  -6,327
  -6,626
  -6,941
  -7,273
  -7,623
  -7,990
  -8,376
  -8,783
  -9,210
  -9,660
  -10,132
  -10,629
  -11,151
  -11,699
  -12,276
  -12,882
  -13,518
  -14,187
  -14,889
  -15,627
  -16,403
  -17,217
  -18,072
  -18,971
Cash from operations, $m
  20,188
  22,043
  23,915
  25,884
  27,957
  30,139
  32,437
  34,856
  37,402
  40,085
  42,909
  45,884
  49,016
  52,315
  55,790
  59,449
  63,303
  67,361
  71,635
  76,136
  80,875
  85,865
  91,119
  96,651
  102,475
  108,606
  115,061
  121,855
  129,007
  136,534
Maintenance CAPEX, $m
  -11,052
  -11,660
  -12,296
  -12,961
  -13,656
  -14,383
  -15,145
  -15,942
  -16,778
  -17,653
  -18,570
  -19,530
  -20,538
  -21,593
  -22,701
  -23,862
  -25,079
  -26,356
  -27,696
  -29,102
  -30,577
  -32,124
  -33,748
  -35,452
  -37,240
  -39,117
  -41,087
  -43,154
  -45,325
  -47,603
New CAPEX, $m
  -6,088
  -6,355
  -6,646
  -6,953
  -7,276
  -7,616
  -7,975
  -8,353
  -8,750
  -9,168
  -9,609
  -10,072
  -10,559
  -11,071
  -11,610
  -12,176
  -12,772
  -13,398
  -14,056
  -14,747
  -15,474
  -16,238
  -17,040
  -17,883
  -18,769
  -19,699
  -20,676
  -21,703
  -22,781
  -23,914
Cash from investing activities, $m
  -17,140
  -18,015
  -18,942
  -19,914
  -20,932
  -21,999
  -23,120
  -24,295
  -25,528
  -26,821
  -28,179
  -29,602
  -31,097
  -32,664
  -34,311
  -36,038
  -37,851
  -39,754
  -41,752
  -43,849
  -46,051
  -48,362
  -50,788
  -53,335
  -56,009
  -58,816
  -61,763
  -64,857
  -68,106
  -71,517
Free cash flow, $m
  3,048
  4,028
  4,973
  5,971
  7,026
  8,140
  9,317
  10,561
  11,875
  13,263
  14,731
  16,281
  17,920
  19,651
  21,479
  23,411
  25,452
  27,607
  29,883
  32,286
  34,824
  37,503
  40,331
  43,316
  46,466
  49,790
  53,298
  56,998
  60,901
  65,018
Issuance/(repayment) of debt, $m
  -979
  1,006
  1,052
  1,100
  1,152
  1,205
  1,262
  1,322
  1,385
  1,451
  1,521
  1,594
  1,671
  1,752
  1,838
  1,927
  2,021
  2,121
  2,225
  2,334
  2,449
  2,570
  2,697
  2,830
  2,971
  3,118
  3,272
  3,435
  3,606
  3,785
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  -979
  1,006
  1,052
  1,100
  1,152
  1,205
  1,262
  1,322
  1,385
  1,451
  1,521
  1,594
  1,671
  1,752
  1,838
  1,927
  2,021
  2,121
  2,225
  2,334
  2,449
  2,570
  2,697
  2,830
  2,971
  3,118
  3,272
  3,435
  3,606
  3,785
Total cash flow (excl. dividends), $m
  2,069
  5,034
  6,025
  7,072
  8,177
  9,345
  10,579
  11,882
  13,260
  14,715
  16,252
  17,875
  19,591
  21,403
  23,317
  25,338
  27,473
  29,727
  32,108
  34,620
  37,273
  40,073
  43,028
  46,146
  49,437
  52,908
  56,570
  60,433
  64,507
  68,803
Retained Cash Flow (-), $m
  -2,051
  -112
  -117
  -122
  -128
  -134
  -140
  -147
  -154
  -161
  -169
  -177
  -186
  -195
  -204
  -214
  -225
  -236
  -247
  -259
  -272
  -286
  -300
  -314
  -330
  -346
  -364
  -382
  -401
  -421
Prev. year cash balance distribution, $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 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
  19
  4,922
  5,908
  6,949
  8,049
  9,211
  10,439
  11,736
  13,106
  14,553
  16,083
  17,698
  19,405
  21,208
  23,113
  25,124
  27,248
  29,492
  31,860
  34,361
  37,001
  39,787
  42,728
  45,832
  49,107
  52,562
  56,206
  60,051
  64,106
  68,382
Discount rate, %
  14.90
  15.65
  16.43
  17.25
  18.11
  19.02
  19.97
  20.97
  22.01
  23.11
  24.27
  25.48
  26.76
  28.10
  29.50
  30.98
  32.52
  34.15
  35.86
  37.65
  39.53
  41.51
  43.59
  45.77
  48.05
  50.46
  52.98
  55.63
  58.41
  61.33
PV of cash for distribution, $m
  16
  3,680
  3,744
  3,677
  3,502
  3,241
  2,919
  2,560
  2,187
  1,819
  1,473
  1,161
  890
  662
  478
  335
  227
  149
  94
  58
  34
  19
  10
  5
  3
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  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

The Allstate Corporation (Allstate) is a holding company for Allstate Insurance Company. The Company's business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and other subsidiaries. It is engaged in the property-liability insurance business and the life insurance, retirement and investment products business. Its segments include Allstate Protection, Allstate Financial, Discontinued Lines and Coverages, and Corporate and Other. The Allstate Protection segment sells private passenger auto, homeowners, and other property-liability insurance products through agencies and directly through contact centers and the Internet. The Allstate Financial segment sells life insurance and voluntary accident and health insurance products. The Corporate and Other segment consists of holding company activities and certain non-insurance operations. Its Discontinued Lines and Coverages segment includes results from property-liability insurance coverage.

FINANCIAL RATIOS  of  Allstate (ALL)

Valuation Ratios
P/E Ratio 19.5
Price to Sales 1
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 9.2
Price to Free Cash Flow 9.9
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.3%
Cap. Spend. - 3 Yr. Gr. Rate 8.6%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 30.9%
Total Debt to Equity 30.9%
Interest Coverage 11
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 2.3%
Return On Total Capital 7.2%
Ret/ On T. Cap. - 3 Yr. Avg. 8.6%
Return On Equity 9.2%
Return On Equity - 3 Yr. Avg. 10.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 9.3%
EBITDA Margin - 3 Yr. Avg. 11.4%
Operating Margin 7.5%
Oper. Margin - 3 Yr. Avg. 9.5%
Pre-Tax Margin 7.5%
Pre-Tax Margin - 3 Yr. Avg. 9.5%
Net Profit Margin 5.1%
Net Profit Margin - 3 Yr. Avg. 6.4%
Effective Tax Rate 31.8%
Eff/ Tax Rate - 3 Yr. Avg. 32.8%
Payout Ratio 32.1%

ALL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALL stock intrinsic value calculation we used $38524 million for the last fiscal year's total revenue generated by Allstate. The default revenue input number comes from 2017 income statement of Allstate. 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 ALL stock valuation model: a) initial revenue growth rate of 5.5% 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 14.9%, whose default value for ALL is calculated based on our internal credit rating of Allstate, 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 Allstate.
    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 ALL stock the variable cost ratio is equal to 16.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $24024 million in the base year in the intrinsic value calculation for ALL 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 Allstate.

Corporate tax rate of 27% is the nominal tax rate for Allstate. 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 ALL 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 ALL are equal to 286.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Allstate 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 ALL is equal to -227.6%. 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 Allstate - 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 362 million for Allstate 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 Allstate at the current share price and the inputted number of shares is $36.2 billion.

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COMPANY NEWS

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▶ Allstate Increases Profits and Growth   [06:04PM  Business Wire]
▶ Allstate: 2Q Earnings Snapshot   [05:16PM  Associated Press]
▶ Allstate Announces Quarterly Dividend   [Jul-24-18 01:38PM  Business Wire]
▶ Allstate's Dennis Haysbert muses on 'truth' in new ads   [Jul-23-18 03:36PM  American City Business Journals]
▶ Buckingham Upgrades Allstate But Remains Cautious   [Jul-18-18 12:35PM  Benzinga]
▶ Allstate Announces May 2018 Catastrophe Loss Estimate   [Jun-21-18 08:32AM  Business Wire]
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▶ Closing Bell Ringer: June 4, 2018   [Jun-04-18 04:00PM  CNBC Videos]
▶ Allstate Announces Preferred Stock Dividends   [May-24-18 03:21PM  PR Newswire]
▶ Allstate Returns Cash to Shareholders Through Dividends   [May-11-18 02:44PM  Business Wire]
▶ Hawaii Volcano Victims May Face Insurance Crisis   [May-07-18 09:27AM  Fortune]
▶ San Diego jury awards $18M to fired Allstate employee   [May-05-18 04:10PM  Associated Press]
▶ Allstate Executing Profitable Growth Plan   [May-01-18 06:38PM  Business Wire]
▶ Allstate: 1Q Earnings Snapshot   [05:32PM  Associated Press]
▶ Apple earnings What you need to know in markets on Tuesday   [Apr-30-18 06:55PM  Yahoo Finance]
▶ Five Insurance Stocks to Consider Amid Higher Interest Rates   [Apr-16-18 09:54PM  Insider Monkey]
▶ Edited Transcript of ALL presentation 7-Mar-17 1:05pm GMT   [Apr-10-18 10:59AM  Thomson Reuters StreetEvents]
▶ Why should you pay for insurance company ads? Clearcover says 'enough'   [Mar-19-18 02:41PM  American City Business Journals]
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