PSO 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 PSO, the DDM model, as implemented by StockNews, implies a positive return of 111.31% relative to its current price. Digging deeper, the aspects of Pearson Plc's dividend discount model that we found most interesting were:

• In comparison to other US listed dividend yielding stocks in the Consumer Cyclical sector, Pearson Plc's expected return of 111.31% is higher than 88.06% of its fellow sector mates.
• Compared to all dividend issuing stocks in our set, Pearson Plc bears a discount rate, according to our calculations, lower than 88.06% 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 3.24% 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 91.04% of them.

PSO Dividends vs. Peers