American Express Co. (AXP) Dividends

AXP Price Forecast Based on Dividend Discount Model

A technique commonly used by dividend investors to value dividend-issuing stocks is the Dividend Discount Model (DDM), which seeks to determine a fair share price based on the dividend provided by the company relative to a number of other company-specific factors. In the case of AXP, the dividend discount model StockNews created for the company implies a negative return of 75.76%. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for American Express Co are:

• Compared to other US stocks that pay a dividend, AXP offers a dividend yield in the bottom 0.99% of its fellow sector mates.
• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Financial Services sector, the expected return of -75.76%, based on the stock's current share price and target price based on a dividend discount model, is greater than merely 11.03% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, American Express Co bears a discount rate, according to our calculations, lower than merely 11.03% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).
• Beta, which compares volatilty of an individual stock to that of the S&P 500, is lower for American Express Co than it is for merely 20.91% of other dividend issuers in the Financial Services sector.

AXP Dividends vs. Peers