Evolution Petroleum (Evolution Petroleum) Intrinsic Value: DCF (Dividends Based) : $4.98 (As of Apr. 27, 2024)

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Evolution Petroleum Intrinsic Value: DCF (Dividends Based) Chart

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Competitive Comparison of Evolution Petroleum's Intrinsic Value: DCF (Dividends Based)

For the Oil & Gas E&P subindustry, Evolution Petroleum's Price-to-DCF (Dividends Based), along with its competitors' market caps and Price-to-DCF (Dividends Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

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Evolution Petroleum's Price-to-DCF (Dividends Based) Distribution in the Oil & Gas Industry

For the Oil & Gas industry and Energy sector, Evolution Petroleum's Price-to-DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where Evolution Petroleum's Price-to-DCF (Dividends Based) falls into.

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Evolution Petroleum Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. The calculation method is the same as Discounted Cash Flow model except adjusted dividend are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year Dividend Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year Dividend Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year Dividend Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Evolution Petroleum's average Dividend Growth Rate in the past 5 years was 0.80%, which is less than 5%. GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: adjusted dividends per share = $0.4311.
GuruFocus uses adjusted dividends per share by default to ensure that the valuation reflects the total value of the company, as the actual dividend is only a portion of the total value.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

Evolution Petroleum's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Evolution Petroleum  (AMEX:EPM) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.

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Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

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Evolution Petroleum Intrinsic Value: DCF (Dividends Based) Related Terms

Thank you for viewing the detailed overview of Evolution Petroleum's Intrinsic Value: DCF (Dividends Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Predictability Rank Intrinsic Value: Projected FCF Intrinsic Value: DCF (FCF Based) Intrinsic Value: DCF (Earnings Based) Margin of Safety % (DCF Dividends Based) Margin of Safety % (DCF FCF Based) Margin of Safety % (DCF Earnings Based) 5-Year Dividend Growth Rate Dividends per Share

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Evolution Petroleum (Evolution Petroleum) Business Description

Executives

John Mark Bunch	officer: COO	1155 DAIRY ASHFORD RD., SUITE 425, HOUSTON TX 77079
Kelly Beatty	officer: Principal Accounting Officer	1155 DAIRY ASHFORD RD., SUITE 425, HOUSTON TX 77079
Myra C Bierria	director	1155 DAIRY ASHFORD, SUITE 425, HOUSTON TX 77079
Ryan Stash	officer: SVP & CFO	1155 DAIRY ASHFORD ROAD, SUITE 425, HOUSTON TX 77079
Roderick A. Schultz	officer: Chief Accounting Officer	4621 PINERIDGE STREET, HOUSTON TX 77009
Marjorie Anne Hargrave	director	999 18TH STREET, SUITE 1925N, DENVER CO 80202
Jason E. Brown	officer: President & CEO	1000 LOUISIANA, SUITE 6700, HOUSTON TX 77002
Marran H. Ogilvie	director	599 LEXINGTON AVENUE, NEW YORK NY 10022
David Joe	officer: VP, Chief Admin. Officer	2500 CITYWEST BLVD., SUITE 1300, HOUSTON TX 77042
Jvl Advisors, L.l.c.	10 percent owner	10,000 MEMORIAL DRIVE, SUITE 550, HOUSTON TX 77024
Randall D Keys	officer: President, CFO & Treasurer	3 HICKORY SHADOWS DR, HOUSTON TX 77055
Peninsula Capital Management Inc	director	235 PINE STREET, SUITE 1600, SAN FRANCISCO CA 94104
Kelly William Loyd	director	10000 MEMORIAL DRIVE, SUITE 550, HOUSTON TX 77024
William Dozier	director	3000 SAGE #1312, HOUSTON TX 77056
Gene G Stoever	director	5415 GRAYSTONE LANE, HOUSTON TX 77069