PAA 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 PAA, the dividend discount model StockNews created for the company implies a positive return of 230.35%. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for Plains All American Pipeline Lp are:

• Compared to other US stocks that pay a dividend, Plains All American Pipeline Lp produces a dividend yield 28.8% -- which falls in the top 2.88%.
• Plains All American Pipeline Lp's market cap of $4 billion US dollars puts it in the large-sized market cap class; amongst this group of stocks, its equity discount rate is lower than 4.2% of them.
• A stock's beta generally indicates its volatility relative to the broader equity market; as for PAA, approximately 3.37% of US-listed dividend issuers had a higher beta, and thus may have greater price volatility.

PAA Dividends vs. Peers