Estimate any dividend stock's fair value using the Gordon Growth Model (also known as the Dividend Discount Model). Enter the current dividend, expected growth, and your required return — the calculator returns a per-share fair value and a 30% margin-of-safety buy zone.
Sum of the last four declared quarterly dividends.
Use 3–6% for mature payers. Must stay below discount rate.
Your hurdle rate. 8–10% is typical for dividend stocks.
Formula: V = D₁ / (r − g). Implied dividend yield at fair value: 3.81%. Only valid when growth is below your required return.
The Gordon Growth Model values a share as the present value of all future dividends growing at a constant rate forever: V = D₁ / (r − g). It is the cleanest valuation tool for mature dividend payers — utilities, consumer staples, large banks, blue-chip REITs.
A utility pays $2.50 per share, grows the dividend 5% per year, and you require a 9% return. D₁ = $2.625, so V = $2.625 / (0.09 − 0.05) = $65.63. A 30% margin of safety means buying below ~$45.94.
Disclaimer: This is not financial advice. All analyses are for educational purposes only. Always do your own research (DYOR) and consult a licensed financial advisor before making investment decisions. Past performance does not guarantee future results.
