CMI 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 CMI, the DDM model generated by StockNews estimates a return of negative 10.81% in comparison to its current price. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for Cummins Inc are:

• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Industrials sector, Cummins Inc's expected return of -10.81% is higher than 75.58% of its fellow sector mates.
• Compared to all dividend issuing stocks in our set, CMI has a discount rate lower than 75.58% of them (a lower discount rate is associated with lower risk).
• Beta is a measure of how volatile a stock is relative to the S&P 500; for CMI, its beta is lower than 70.72% of stocks in the large-sized revenue class.

CMI Dividends vs. Peers