WFC 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. Regarding Wells Fargo & Company, the dividend discount model StockNews created for the company implies a positive return of 75.97%. Digging deeper, the aspects of Wells Fargo & Company's dividend discount model that we found most interesting were:

• In comparison to other US listed dividend yielding stocks in the Financial Services sector, Wells Fargo & Company's expected return of 75.97% is higher than 84.83% of its fellow sector mates.
• Compared to all dividend issuing stocks in our set, Wells Fargo & Company bears a discount rate, according to our calculations, lower than 84.83% of them (lower discount rates are generally perceived as positive, and a sign of lower risk).
• Wells Fargo & Company's market cap of $94 billion US dollars puts it in the mega-sized market cap class; amongst this group of stocks, its equity discount rate is lower than merely 10.81% of them.
• Amongst its dividend-issuing peers in the mega-sized market cap category, WFC's beta -- a measure of volatility relative to the market at large -- is lower than merely 10.81% of them.

WFC Dividends vs. Peers