Inspired by Rick’s write-up on McNiven’s Valuation Formula.

McNiven Valuation Calculator

A practical framework for deciding when to Buy, Hold or Reduce — based on equity, future ROE, reinvestment, dividends (incl. franking) and your required return.

V_share = E_share × [((APC / RR) × RI) + D_g] / RR

Assumptions

Equity / share

Forward EPS

Required return (RR) 10.0%

Payout ratio 50%

Franking of dividend 100% franked

Forward ROE (APC)

—

Reinvestment (RI)

—

D_g / equity

—

Grossed-up DPS

—

Current share price

Results

McNiven value

—

At your required return

Implied return @ price

—

Solve for RR where value = price

Price vs value

—

Positive = trading above McNiven

Hold within ±15% of value

Illustrative bands: Buy if price >15% below value, Hold within ±15%, Reduce if price >15% above value.

Sensitivity vs required return

What drives value

Future ROE — if above your RR, reinvestment creates value.
Reinvestment — growth isn’t automatically good when ROE < RR.
Dividends + franking — D_g includes the franking benefit (AU 30% tax gross-up).
Required return — raise it when earnings are less predictable.

North star: What return am I getting for the price I’m paying?

Educational framework only — not financial advice. McNiven’s formula is a decision aid, not a crystal ball. Forecasting equity, ROE and payouts is the hard part. Defaults are round illustrative numbers — replace them with your own assumptions. Do your own research.

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