Rand Capital (Rand Capital) Intrinsic Value: DCF (Dividends Based) : $23.16 (As of May. 17, 2024)

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Rand Capital Intrinsic Value: DCF (Dividends Based) Chart

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Competitive Comparison of Rand Capital's Intrinsic Value: DCF (Dividends Based)

For the Asset Management subindustry, Rand Capital'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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Rand Capital's Price-to-DCF (Dividends Based) Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Rand Capital's Price-to-DCF (Dividends Based) distribution charts can be found below:

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

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Rand Capital 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 4.42%. 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.
=> Rand Capital's average Dividend Growth Rate in the past 3 years was -10.60%, 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 = $2.007.
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.

Rand Capital'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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Rand Capital  (NAS:RAND) 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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Rand Capital Intrinsic Value: DCF (Dividends Based) Related Terms

Thank you for viewing the detailed overview of Rand Capital'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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Rand Capital (Rand Capital) Business Description

Executives

Benjamin E Godley	director	RAND CAPITAL CORPORATION, 14 LAFAYETTE SQUARE, SUITE 2200, BUFFALO NY 14203
Adam Samuel Gusky	director	RAND CAPITAL CORPORATION, 14 LAFAYETTE SQUARE, SUITE 2200, BUFFALO NY 14203
Cari L Jaroslawsky	director	C/O HARTER SECREST & EMERY LLP, 1600 BAUSCH & LOMB PLACE, ROCHESTER NY 14604
Daniel P Penberthy	officer: EVP and CFO	C/O RAND CAPITAL CORP, 2200 RAND BLDG, BUFFALO NY 14203
Robert M Zak	director	250 MAIN STREET, BUFFALO NY 14202
Erland E Kailbourne	director	C/O RAND CAPITAL CORP, 2200 RAND BUILDING, BUFFFALO NY 14203
Heather Eastgate	officer: Chief Compliance Officer	C/O RAND CAPITAL CORPORATION, 14 LAFAYETTE SQUARE, SUITE 1405, BUFFALO NY 14203
East Asset Management, Llc	10 percent owner	777 NW BEACON SQUARE BLVD., BOCA RATON FL 33487
Nancy Marie Stone	officer: Chief Compliance Officer	C/O RAND CAPITAL CORPORATION, 14 LAFAYETTE SQUARE, SUITE 1405, BUFFALO NY 14203
Margaret Brechtel	officer: EVP, Treas., CFO & Sec.	C/O RAND CAPITAL CORPORATION, 14 LAFAYETTE SQUARE, SUITE 1405, BUFFALO NY 14203
User-friendly Holding, Llc	10 percent owner	10200 GROGANS MILL RD., SUITE 440, THE WOODLANDS TX 77380
User-friendly Phone Book, Llc	10 percent owner	10200 GROGANS MILL RD., SUITE 440, THE WOODLANDS TX 77380
Newman Reginald B Ii	director	PRIOR AVIATION SERVICE INC., 50 NORTH AIRPORT DRIVE, BUFFALO NY 14225
Utility Service Holding Co., Inc.	10 percent owner	P.O. BOX 240, WARTHEN GA 31094
Colmac Holdings Ltd	10 percent owner	8 KING STREET EAST, SUITE 1901, TORONTO A6 M5C 1B5