American Express Company (AXP) Dividends

AXP Price Forecast Based on Dividend Discount Model

The Dividend Discount Model (DDM) is a valuation model that attempts to determine a fair share price for a stock, based on the dividend it provides in comparison to several company-specific metrics indicative of the riskiness of the stock and the financial health of the company. As for AXP, the dividend discount model StockNews created for the company implies a negative return of 73.17%. Digging deeper, the aspects of American Express Co's dividend discount model that we found most interesting were:

• 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 -73.17%, based on the stock's current share price and target price based on a dividend discount model, is greater than only 10.61% of the DDM-forecasted return of its its sector peers.
• Out of all stocks in our universe of US-listed dividend-issuing stocks, AXP has a discount rate lower than only 10.61% of them (a lower discount rate is associated with lower risk).
• With a market cap of roughly $97 billion, AXP is in the large-sized market cap class; amongst this group of stocks, its equity discount rate is lower than only 14.61% of them.
• A stock's beta generally indicates its volatility relative to the broader equity market; as for AXP, approximately only 14.48% of US-listed dividend issuers had a higher beta, and thus may have greater price volatility.

AXP Dividends vs. Peers