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 dividend discount model StockNews created for the company implies a positive return of 65%. Digging deeper, the aspects of International Business Machines Corp's dividend discount model that we found most interesting were:

• Relative to all dividend yielding stocks in our set, International Business Machines Corp's dividend yield of 5.05% is in the top 23.62%.
• In comparison to other US listed dividend yielding stocks in the Technology sector, the expected return of 65%, based on the stock's current share price and target price based on a dividend discount model, is greater than 85.51% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, International Business Machines Corp bears a discount rate, according to our calculations, lower than 85.51% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).

IBM Dividends vs. Peers