Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Diamond Hill Investment Group, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -3.5% to -3.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 8946, DPO 37, DIO 60). At a 5.5% WACC with mid-year discounting, the terminal value (0% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 8.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $2027.83 per share, suggesting DHIL is undervalued by 1058.8% at the current price of $174.99.
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| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | -5,310 | -5,123 | -4,942 | -4,768 | -4,601 | -4,716 |
| (−) Net Interest | 3 | 3 | 3 | 3 | 3 | 3 |
| (+) D&A | 488 | 581 | 672 | 760 | 844 | 865 |
| EBITDA | -4,819 | -4,538 | -4,267 | -4,006 | -3,754 | -3,848 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 470 | 454 | 438 | 422 | 408 | — |
| (−) ΔWC | -15,527 | -132 | -127 | -122 | -118 | — |
| Free Cash Flow (FCF) | 10,238 | -4,861 | -4,578 | -4,306 | -4,043 | — |
| Peers' EBITDA Multiple | 8.6x | |||||
| Terminal Value | -33,053 | |||||
| WACC / Discount Rate | 5.54% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 9,966 | -4,483 | -4,001 | -3,566 | -3,173 | -25,247 |
| Enterprise Value | -30,504 | |||||
| Projection Period | -5,257 | 0.0% | ||||
| Terminal Value | -25,247 | 0.0% | ||||
| (−) Current Net Debt | (36,025) | |||||
| Equity Value | 5,521 | |||||
| (÷) Outstanding Shares | 3M | |||||
| Fair Price | $2028 | +1058.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 4.6x | 6.6x | 8.6x | 10.6x | 12.6x |
|---|---|---|---|---|---|
| 3.5% | $5568 | $3192 | $817 | $0 | $0 |
| 4.5% | $5967 | $3703 | $1439 | $0 | $0 |
| 5.5% | $6345 | $4187 | $2028 | $0 | $0 |
| 6.5% | $6704 | $4645 | $2586 | $527 | $0 |
| 7.5% | $7046 | $5080 | $3115 | $1150 | $0 |
Current price: $174.99. Green = undervalued, Red = overvalued.
Based on default parameters
Using the industry peer median P/E Multiples multiple (trailing + forward), Diamond Hill Investment Group, Inc. (DHIL) has a fair value of $118.33 based on 5 comparable companies in the Asset Management industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| Diamond Hill Investment Group, Inc.DHIL | 476 | 9.8x | 13.9x |
| Gladstone Capital Corporation | 422 | 7.3x | 5.6x |
| Source Capital, Inc. | 373 | 6.3x | 2.8x |
| Barings Corporate Investors | 362 | 10.1x | — |
| PennantPark Investment Corporation | 303 | 9.3x | 5.1x |
| Stellus Capital Investment Corporation | 280 | 10.2x | 8.6x |
| Industry Median | 9.3x | 5.3x | |
| (*) Profit after tax | 49 | 34 | |
| Equity Value | 453 | 192 | |
| (/) Outstanding shares | 3 | 3 | |
| Fair Price | $166 | $70 | |
Using the industry peer median EV/EBITDA multiple (trailing + forward), Diamond Hill Investment Group, Inc. (DHIL) has a fair value of $13,478.43 based on 4 comparable companies in the Asset Management industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing EV/EBITDA | Forward EV/EBITDA | |
|---|---|---|---|
| Diamond Hill Investment Group, Inc.DHIL | 476 | -519.2x | -461.5x |
| Gladstone Capital Corporation | 422 | 6.4x | 9.9x |
| Source Capital, Inc. | 373 | 5.8x | 0.1x |
| Barings Corporate Investors | 362 | 10.7x | — |
| PennantPark Investment Corporation | 303 | 28.1x | 16.3x |
| Industry Median | 8.6x | 9.9x | |
| (*) EBITDA | 68 | 77 | |
| = Enterprise Value | 588 | 765 | |
| (-) Net Debt | -36,025 | -36,025 | |
| Equity Value | 36,613 | 36,790 | |
| (/) Outstanding shares | 3 | 3 | |
| Fair Price | $13446 | $13511 | |
Using the industry peer median EV/Revenue multiple (trailing + forward), Diamond Hill Investment Group, Inc. (DHIL) has a fair value of $13,700.43 based on 4 comparable companies in the Asset Management industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing EV/Revenue | Forward EV/Revenue | |
|---|---|---|---|
| Diamond Hill Investment Group, Inc.DHIL | 476 | -225.2x | -200.2x |
| Gladstone Capital Corporation | 422 | 5.4x | 8.4x |
| Source Capital, Inc. | 373 | 7.9x | 0.1x |
| Barings Corporate Investors | 362 | 9.0x | — |
| PennantPark Investment Corporation | 303 | 11.9x | 6.9x |
| Industry Median | 8.5x | 6.9x | |
| (*) Revenue | 158 | 178 | |
| = Enterprise Value | 1,334 | 1,229 | |
| (-) Net Debt | -36,025 | -36,025 | |
| Equity Value | 37,359 | 37,254 | |
| (/) Outstanding shares | 3 | 3 | |
| Fair Price | $13720 | $13681 | |
Using the PEG framework with historical EPS growth of 8.0% plus 5.7% dividend yield, the company has a fair value of $143.28 based on TTM EPS (FY2025) of $17.91.
| EPS Growth RateHistorical | -6.4% |
| Dividend Yield | +5.7% |
| Adjusted Growth (clamped 8–25%)Clamped | 8.0% |
| Fair P/E | 8.0x |
| TTM EPS (FY2025) | $17.91 |
| Fair Value | $143.28 |
No analyst estimates available.
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $74.2M | $23.34 | — |
| FY2022 | $40.4M | $13.01 | -44.3% |
| FY2023 | $42.2M | $14.32 | +10.1% |
| FY2024 | $43.2M | $15.66 | +9.4% |
| FY2025 | $48.8M | $17.91 | +14.4% |
4Y Historical EPS CAGR: -6.4%
Using the Two-Stage Dividend Discount Model with a Cost of Equity of 22.4% and projected dividend growth of 0.0%, the fair value is $48.35 per share. The DDM range is $43.86 – $58.01 based on sensitivity analysis across Cost of Equity and growth rate assumptions.
| Year | DPS | Payout Ratio | YoY Growth |
|---|---|---|---|
| 2025 | $9.98 | 55.8% | +66.6% |
| 2024 | $5.99 | 38.3% | -0.0% |
| 2023 | $5.99 | 41.9% | -39.3% |
| 2022 | $9.88 | 75.9% | -57.0% |
| 2021 | $22.95 | 98.3% | — |
| Year | Projected DPS | Growth | Discount Factor | Present Value |
|---|---|---|---|---|
| 2026 | $9.98 | 0.0% | 0.8173 | $8.16 |
| 2027 | $9.98 | 0.0% | 0.6679 | $6.67 |
| 2028 | $9.98 | 0.0% | 0.5459 | $5.45 |
| 2029 | $9.98 | 0.0% | 0.4461 | $4.45 |
| 2030 | $9.98 | 0.0% | 0.3646 | $3.64 |
| Terminal Value | $10.33 DPS | 3.5% | $19.98 |
Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.
| Ke \ Growth | 0.0% | 0.0% | 0.0% | 1.0% | 2.0% |
|---|---|---|---|---|---|
| 20.4% | $54 | $54 | $54 | $56 | $58 |
| 21.4% | $51 | $51 | $51 | $53 | $55 |
| 22.4% | $48 | $48 | $48 | $50 | $52 |
| 23.4% | $46 | $46 | $46 | $48 | $49 |
| 24.4% | $44 | $44 | $44 | $45 | $47 |
Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.