GFED 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. Regarding Guaranty Federal Bancshares Inc, the dividend discount model StockNews created for the company implies a positive return of 36.1%. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for Guaranty Federal Bancshares Inc are:

• 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 36.1%, based on the stock's current share price and target price based on a dividend discount model, is greater than 83.3% of the DDM-forecasted return of its its sector peers.
• Out of all stocks in our universe of US-listed dividend-issuing stocks, GFED has a discount rate lower than 83.3% of them (a lower discount rate is associated with lower risk).
• A stock's beta generally indicates its volatility relative to the broader equity market; for Guaranty Federal Bancshares Inc, its beta is lower than 95.9% of dividend issuing stocks we observed.
• As other dividend issuers in the Financial Services sector, GFED's equity discount rate is less than 87.62% of those stocks.

GFED Dividends vs. Peers