Dividend Discount Model’s Four Essential Steps

The Dividend Discount Model’s four essential steps are summarized below. The purpose is to provide a quick reference for this valuation, give an example, and offer a spreadsheet template to facilitate calculations and sensitivity analysis. We’ve covered how to value a business with a Constant Dividend Growth Rate and, with a Multi-Stage Dividend Growth Rate.  With […]

Multi-stage Dividend Discount Valuation Part 2

We can invest in an intelligent and disciplined manner if we know the price and the value of a company. That is because price is what we pay and value is what we get. Today we venture into Part 2 of the Dividend Discount Valuation, the Multi-stage Dividend Discount Valuation, where we discuss how to […]

Dividend Discount Valuation Part 1

Price is what we pay and value is what we get. The only way we can invest in an intelligent and disciplined manner is to know the difference between the price and value. Today we venture into our first valuation model of this series, the Dividend Discount Valuation.  If you haven’t had a chance, read my introduction to valuation […]

Valuations and Intrinsic Value – The Key to Buy Low, and Sell High

Common sense tells us that the adage “buy low and sell high” captures investment success. Like anything else we buy, we need a reference point to decide if price is low, high, or somewhere else. That reference point is the valuations of the underlying business or its “intrinsic value.” When we buy a share of […]