PSO 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 PSO, the dividend discount model StockNews created for the company implies a positive return of 66.7%. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for Pearson Plc are:

• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Consumer Cyclical sector, the expected return of 66.7%, based on the stock's current share price and target price based on a dividend discount model, is greater than 88.89% of the DDM-forecasted return of its its sector peers.
• 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 88.89% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).
• In terms of who is growing the amount of dividends they return to shareholders, Pearson Plc has been increasing its dividends at a faster rate than 2.84% of US-listed dividend-issuing stocks we observed.
• As other dividend issuers in the Consumer Cyclical sector, Pearson Plc has an equity discount rate lower than 88.19% of them.

PSO Dividends vs. Peers