Assurant, Inc.AIZNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $898.76 per share(market-calibrated)

+284.8%

Upside to Fair Value

Current

$233.55

Pure Model

$964.82

Fair Value

$898.76

Bull Case

$1,187.71

Bear Case

$780.48

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $964.82.

What's Driving This Ratingfor AIZ

↓

CapEx normalizing toward maintenance

Historical CapEx is 1.61% of revenue (heavy investment phase). Model fades this to 1.50% by Year 10, freeing up ~$20M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 7.89% — below the sector mature average of 28.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $4.2B (23.78% margin).

→

Moderate revenue growth

Analyst consensus projects 6.36% revenue growth, fading to 2.50% by Year 10. Revenue reaches $17.5B (vs $12.8B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $1,120.45/share (25.0x terminal FCF) while exit multiple gives $809.20/share (16.1x terminal FCF). The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 74.63% indicates efficient cash generation. FCF reaches $3.3B by Year 10 (18.94% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.57

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)7.09%

Cost of Debt

Pre-tax Cost of Debt4.94%

Tax Rate19.74%

After-tax Cost of Debt3.96%

Equity Weight (E/V)84.23%

Debt Weight (D/V)15.77%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (84.23% × 7.09%) + (15.77% × 3.96%)

= 6.59%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$13.6B	$14.8B	$15.5B	$16.3B	$17.5B
EBIT	$1.1B	$1.2B	$2.3B	$3.2B	$4.2B
Tax	$212M	$230M	$463M	$636M	$824M
NOPAT	$863M	$934M	$1.9B	$2.6B	$3.3B
+ Depreciation	$218M	$236M	$248M	$260M	$280M
- Capex	$220M	$234M	$242M	$250M	$263M
- Δ NWC	$81M	$38M	$38M	$40M	$43M
Free Cash Flow	$779M	$898M	$1.9B	$2.6B	$3.3B
Discount Factor	0.938	0.826	0.727	0.640	0.528
Present Value	$731M	$741M	$1.3B	$1.6B	$1.8B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$3.3B

Terminal Growth Rate2.50%

WACC6.59%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$83.2B

PV of Terminal Value$43.9B

Exit Multiple Method

Year 10 EBITDA$4.5B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$53.4B

PV of Terminal Value$28.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$13.0B

PV of Terminal Value$43.9B

Enterprise Value$56.9B

(-) Net Debt$373M

Equity Value$56.5B

Shares Outstanding50M

Price per Share$1,120.45

Exit Multiple Method

PV of Projected FCFs$13.0B

PV of Terminal Value$28.2B

Enterprise Value$41.2B

(-) Net Debt$373M

Equity Value$40.8B

Shares Outstanding50M

Price per Share$809.20

Pure Model Fair Value

$964.82

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.59%	$1,310.46	$1,447.29	$1,649.44	$1,642.26	$1,575.12
5.59%	$1,046.85	$1,115.37	$1,206.03	$1,331.63	$1,517.19
6.59%	$876.00	$915.58	$964.82	$1,027.77	$1,111.06
7.59%	$753.63	$778.61	$808.49	$844.88	$890.16
8.59%	$660.25	$677.00	$696.50	$719.49	$746.98

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$780.48

234.2% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.72

Base Case

$964.82

313.1% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.57

Bull Case

$1,187.71

408.5% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.49

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth6.36%

Year 3 Revenue Growth2.61%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin7.89%

Terminal EBIT Margin28.00%

Tax Rate19.74%

Historical Capex / Rev1.61%

Terminal Capex / Rev1.50%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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