ABB Price Forecast Based on Dividend Discount Model

For dividend yielding stocks, the Dividend Discount Model (DDM) is a common valuation tool; it attempts to extrapolate a fair share price based primarily on the dividend the stock provides relative to a number of other quantiative aspects of its business. Regarding Abb Ltd, the DDM model, as implemented by StockNews, implies a negative return of 2.74% relative to its current price. To help understand and contextualize the model's evaluation of ABB, investors may wish to consider are:

• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Industrials sector, the expected return of -2.74%, based on the stock's current share price and target price based on a dividend discount model, is greater than 78.8% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, Abb Ltd bears a discount rate, according to our calculations, lower than 78.8% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).
• Based on dividend growth rate, Abb Ltd has been increasing its dividends at a faster rate than just 12.04% of US-listed dividend-issuing stocks we observed.

ABB Dividends vs. Peers