MED 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. As for MED, the DDM model generated by StockNews estimates a return of negative 12.6% in comparison to its current price. Digging deeper, the aspects of Medifast 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 Consumer Cyclical sector, Medifast Inc's expected return of -12.6% is higher than 80.67% of its fellow sector mates.
• MED's annual revenue of 841 million US dollars puts it in the small-sized revenue class; relative to suck stocks, its discount rate is lower than that of 15.77% of dividend stocks in the same revenue class (a low discount rate is associated with lower risk).
• Compared to all dividend issuing stocks in our set, MED has a discount rate lower than 80.67% of them (a lower discount rate is associated with lower risk).
• Compared to other dividend issuers in the mid-sized market cap category, MED's beta -- a measure of volatility relative to the market at large -- is lower than 83.46% of them.

MED Dividends vs. Peers