PSO 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 PSO, the DDM model generated by StockNews estimates a return of positive 27.73% in comparison to its current price. Digging deeper, the aspects of Pearson Plc'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, Pearson Plc's expected return of 27.73% is higher than 90.73% of its fellow sector mates.
• Out of all stocks in our universe of US-listed dividend-issuing stocks, Pearson Plc bears a discount rate, according to our calculations, lower than 90.73% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).
• Based on dividend growth rate, Pearson Plc has been increasing its dividends at a faster rate than 3.04% of US-listed dividend-issuing stocks we observed.
• As other dividend issuers in the Consumer Cyclical sector, PSO's equity discount rate is less than 86.75% of those stocks.

PSO Dividends vs. Peers