TDS 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. As for TDS, the DDM model, as implemented by StockNews, implies a positive return of 2.28% relative to its current price. Some interesting points we thought investors may wish to consider regarding the dividend discount model forecast for Telephone & Data Systems Inc are:

• If we compare the valuation opportunity a dividend discount model provides relative to other dividend stocks in the Communication Services sector, the expected return of 2.28%, based on the stock's current share price and target price based on a dividend discount model, is greater than only 18.52% of the DDM-forecasted return of its its sector peers.
• Compared to all dividend issuing stocks in our set, TDS has a discount rate lower than only 18.52% of them (a lower discount rate is associated with lower risk).
• Beta, which compares volatilty of an individual stock to that of the S&P 500, is lower for Telephone & Data Systems Inc than it is for 7.41% of other dividend issuers in the Communication Services sector.
• In comparison to its fellow dividend issuing stocks in the Communication Services sector, Telephone & Data Systems Inc has an equity discount rate lower than only 14.81% of them.

TDS Dividends vs. Peers