A Valuation of Canada Deposit Insurance Corporation

Crown Corporations, Ian Madsen, Valuation

Canada Deposit Insurance Corporation Limited, or CDIC, is the Crown corporation that insures against losses of chequing and savings account deposits. Using an intrinsic value method, and discounting to the present CDIC’s projected future net income as a proxy for its hypothetical free cash flows, as the company is today, taxed as it is at statutory rates, the range of estimates is $2.2B to $15.4B, with a tighter range of a median (midpoint of the array of values) of $3.85B to a mean (simple average) of $4.95M.

Under the market-based valuation system, CDIC’s value is estimated to range from $1.11B to $3.10B, with a median (midpoint of the array of values) of $1.50B and a mean (simple average) of $1.72B. Six of eight available valuation metrics were usable.

Read the entire Valuation here.