In this article, I will show you how to use dividend discount models (DDMs) to value dividend-paying stocks. The premise of DDMs is that stocks can be valued by discounting their expected future dividends to present value, given that expected future stock prices are often influenced by anticipated dividends. DDMs are particularly effective for valuing […]
In this article, I will show you to how to value a company using the discounted cash flow model (DCF), and will guide you through a complete DCF valuation for a real company on the stock market. By doing so, we'll be able to estimate the company's intrinsic value, which will tell us whether the […]
In this article, I will show you how to accurately estimate terminal value, which is a figure you'll need to calculate when using the discounted cash flow (DCF) model to value businesses. I'm also going to discuss three ways of calculating the terminal value, in regards to companies on the stock market, and which method […]
In this article, I will discuss the importance of return on invested capital, how you can calculate it, what information the figure provides to investors, and how you can analyze this figure to make better investment decisions. I'll also provide several examples along the way to guide your understanding. The short answer on why return […]
In this article, I will show you how to calculate and analyze Warren Buffett's owners earnings figure. Owners earnings, or cash flow for owners, is a figure that is commonly used for intrinsic value calculations, and is one of the best figures to depict how much cash one can get out of an investment. It […]