POWI Price Forecast Based on Dividend Discount Model

For dividend yielding stocks, the Dividend Discount Model (DDM) is a common valuation tool; it attempts to extrapolate a fair share price based primarily on the dividend the stock provides relative to a number of other quantiative aspects of its business. In the case of POWI, the DDM model generated by StockNews estimates a return of negative 82.68% in comparison to its current price. Digging deeper, the aspects of Power Integrations Inc's dividend discount model that we found most interesting were:

• Compared to other US stocks that pay a dividend, Power Integrations Inc's dividend yield of 0.63% is in the bottom 8.46%.
• POWI's annual revenue of 452 million US dollars puts it in the small-sized revenue class; relative to suck stocks, its discount rate is lower than that of 27.8% of dividend stocks in the same revenue class (a low discount rate is associated with lower risk).
• In terms of opportunity, POWI's provides a return of -82.68% based on the forecast of the dividend discount model we used relative to its current share price; this is a better return than 8.34% of all stocks we measured with our dividend discount model.

POWI Dividends vs. Peers