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. In the case of GFED, the DDM model, as implemented by StockNews, implies a positive return of 54.24% relative to its current price. Digging deeper, the aspects of Guaranty Federal Bancshares Inc'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, Guaranty Federal Bancshares Inc's expected return of 54.24% is higher than 81.64% of its fellow sector mates.
• Compared to all dividend issuing stocks in our set, Guaranty Federal Bancshares Inc bears a discount rate, according to our calculations, lower than 81.64% 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; as for GFED, approximately 96.14% of US-listed dividend issuers had a higher beta, and thus may have greater price volatility.
• As other dividend issuers in the Financial Services sector, GFED's equity discount rate is less than 89.22% of those stocks.

GFED Dividends vs. Peers