AXP 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. As for AXP, the DDM model generated by StockNews estimates a return of negative 57.79% in comparison to its current price. Digging deeper, the aspects of American Express Co's dividend discount model that we found most interesting were:

• In comparison to other stocks in the Financial Services sector, AXP provides shareholders with a dividend yield greater than just 16.22% such stocks.
• 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 -57.79%, based on the stock's current share price and target price based on a dividend discount model, is greater than just 12.16% 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 just 12.16% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).
• Beta tells us how volatile a stock's price is relative to the broader equity index; for American Express Co, its beta is lower than just 14.86% of dividend issuing stocks we observed.

AXP Dividends vs. Peers