Associated Banc-Corp is scored 54 for moat and 32 for management. The management score rests on a return on invested capital of -3.8% and a gross margin of 58.3% — figures that describe capital earning less than it costs to employ. Debt sits at 0.84x equity. The moderate moat and weak management are not the same judgement, and the gap between them is where the argument about this business sits.
Three independent anchors set the price worth paying. Growth is modelled at 11.8% a year, below the 12.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 23.6x. That produces an intrinsic value of $51.05, a 10-CAP price of $36.41 and a payback time price of $49.74, with the value zone set at the highest of the three, $49.74. Today's price of $28.72 sits inside that zone.
The price sits inside the value zone, but the business scores 54 for moat and 32 for management. Cheap and good are different tests, and only one of them is passed here.
| Price | $28.72 |
| Market cap | $5.4B |
| P/E ratio | 10.0x |
| Return on invested capital | -3.8% |
| Gross margin | 58.3% |
| Debt to equity | 0.84x |
| Free cash flow yield | 13.6% |
| Growth rate used | 11.8% |
| Growth rate measured | 12.0% |
| Exit multiple assumed | 23.6x |
| Company | Moat | Buy price |
| Bank Ozk (OZK) | 68 | $114.17 |
| Flagstar Bank Na (FLG) | 9 | $3.57 |
| Wsfs Financial Corp (WSFS) | 70 | $70.77 |
| Old National Bancorp (ONB) | 62 | $40.18 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Associated Banc-Corp rather than accepting ours.