CHCO 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 CHCO, the DDM model generated by StockNews estimates a return of positive 30.51% in comparison to its current price. Digging deeper, the aspects of City Holding 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 30.51%, based on the stock's current share price and target price based on a dividend discount model, is greater than 74.45% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, CHCO has a discount rate lower than 74.45% of them (a lower discount rate is associated with lower risk).
• Beta, a measure of volatility relative to the stock market overall, is lower for CHCO than it is for 83.03% of other equities in the Financial Services sector that also issue dividends.
• As other dividend issuers in the Financial Services sector, CHCO's equity discount rate is less than 86.03% of those stocks.

CHCO Dividends vs. Peers