IBM Price Forecast Based on Dividend Discount Model

The Dividend Discount Model (DDM) is a valuation model that attempts to determine a fair share price for a stock, based on the dividend it provides in comparison to several company-specific metrics indicative of the riskiness of the stock and the financial health of the company. In the case of IBM, the DDM model generated by StockNews estimates a return of positive 63.93% in comparison to its current price. To help understand and contextualize the model's evaluation of IBM, investors may wish to consider are:

• Relative to all dividend yielding stocks in our set, International Business Machines Corp produces a dividend yield 5.41% -- which falls in the top 19.57%.
• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Technology sector, the expected return of 63.93%, based on the stock's current share price and target price based on a dividend discount model, is greater than 87.9% of the DDM-forecasted return of its its sector peers.
• Out of all stocks in our universe of US-listed dividend-issuing stocks, International Business Machines Corp bears a discount rate, according to our calculations, lower than 87.9% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).

IBM Dividends vs. Peers