Dividend Discount Calculator. This is a free tool that lets you input constant, 2 stage, 3 stage, or 4 stage dividend growth. Quite useful to a dividend investor such as myself!
http://www.bargainbininvesting.com/tools/dividend-valuation-tool.html
Discounted Cash Flow Calculator. Another free tool to value stocks. I like this particular one because it offers two stages.
http://moneychimp.com/articles/valuation/dcf.htm
Morningstar.com Fair Value Estimate. I'm not exactly sure how this is calculated, but I do trust morningstar. I like this as a comparison. You can also find historical data and tons of other free information at this site. 5 year average P/E and yield are just a few clicks away.
http://www.morningstar.com/
Enjoy my mad paint skills:
F.A.S.T. Graphs. This is the best valuation tool I've ever used. Bar none. It does cost $10/month which is unfortunate because most of the bloggers on here are tightwads, myself included. I recommend doing the 14 day trial and cancelling before payment. Instead of maintaining a monthly subscription, I might just do quarterly reviews. If I do go this route, it will be after earnings season to make sure the data is current.
http://www.fastgraphs.com/
Do you have better resources? If so, please share!
CI--- Thanks for sharing the links. FAST graphs is one I'm really wanting to learn more about. I've yet to acutally use them, but they do seem to be a potentially valuable resource.
ReplyDeleteA bonus with FAST Graphs is that it requires very little work. Plus I really enjoy seeing a visual depiction instead of just a number.
DeleteWhen I went to Morningstar and looked up a Fair Value Estimate for a stock, it told me that a premium subscription is required. Am I looking in the wrong place?
ReplyDeleteNever mind, I see what you did. Weird that the info is shown under the Industry Peers section but not in the main Quote Overview area.
DeleteYes. I used to think it was a premium feature, but Dividend Growth Machine showed me otherwise a few weeks ago. Enjoy!
DeleteThanks for sharing the links. Except the F.A.S.T. and the bargain Bin I am using the other two too. I am subscribed to Mornigstar to be able to read their Analysis and see what they have to say about the stocks I own. Instead of Bargain Bin I found a different website with the same calculator on it, but recently I am incorporating that formula into my spreadsheet to calculate it automatically for any symbol I enter in. Thanks again for sharing. Recently I was interested in seeing how you evaluate stocks, because, personally, I hate crunching numbers, so I am trying to keep it as simple as possible, more like a technical analysis approach. So I look at Morningstar what their fair value is, then if the stock pays dividend and what is the rate, what is the dividend 5yr average growth, how long it pays the dividend and how many years it's been increasing them and then if I like it, I take a look at the chart to find my entry point (mostly when the stock is in pullback). That's it.
ReplyDeleteI see. My first step is to identify companies I want to own. I look at dividend metrics, debt, moats, future prospects, etc. You can see the list of companies on my watch list page.
DeleteI then figure out buy prices and wait for the stocks to hit them. Sometimes they never do. I'd like to own CL, MDT, etc. but it has not been in the cards. I had some chances in the past, but ended up going with some other companies. If only I could buy everything!
My buy prices could be way off which is why I like to compare it to FAST Graphs or morningstar. If there is a huge difference, maybe I need to do it again.
I've been blocked again :(
DeleteI think it had something to do with the activex controls or whatever it's called...
You may be in an area where I block the entire IP address, sometimes I add a mask such as 75.*.*.* and then every IP address starting with 75 is blocked. It looks like you are sharing IP which was many times in the past used by spammers. I would like to resolve it if you tell me what IP you use or the first one or two numbers in you IP so I can release that address from the list.
DeleteI bet it's because I'm in S. Korea. Also I use a bunch of computers and internet connections. I use 2 personal computers and about 5-6 more at work. I have broadband that I share with the guy next to me and also tether my phone for internet sometimes. Those are Korean. The computers I use at work should be US IPs since it's military. Oh well, please do not feel I am ignoring you.
DeleteOne other resource is GuruFocus. They show you the intrinsic value of a stock using several different methods which is great because it gives you a range instead of just a single number.
ReplyDeleteI appreciate the tip, and will be checking that out as soon as I finish these comments! Thanks!
DeleteCI,
ReplyDeleteGreat resources up there. I think you pretty much nailed it. If you still don't feel comfortable with a valuation after a DDM, DCF, FAST Graph and Morningstar Fair Value, then...maybe you're not ready to invest with that company. I think we all have to remember that valuing a company is just as much art as it is science. And even then, valuation as a current number only goes so far...as I like to look at the qualitative analysis (what's the long-term story?) just as much as, if not more than, the quantitative (numbers) side.
That being said, all of the above are outstanding ways to get a quick idea if a company is attractively priced for long-term success or not. I'd also say I use S&P's numbers, which are free to me through my broker (Scottrade). They give a 1-year price target and current fair price numbers on most major companies they follow. They also give a pretty detailed fundamental quantitative and qualitative analysis on these stocks.
Best wishes!
Good advise.
DeleteI place a lot of emphasis on historical valuations which is easy enough to look up. It's a problem with KMI however. It's kind of funny that after all the worrying and fuss I still have the same buy price on KMI: $35. Haha! I know they just released earnings and raised the dividend however (time to look at it again).
CI
Thanks for sharing these links CI. The discounted cash flow calculator is especially useful. The two stages are very useful.
ReplyDeleteThanks for sharing these. I use morningstar as well and subscribe to their premium service in order to compare my analysis to other analysts as well.
ReplyDeleteAnother thing I like about morningstar is you can see what sectors are lagging. I go what I call "dumpster diving" and find the best companies in that sector and use those companies to generate trade ideas. For example when the Fukushima disaster occurred uranium companies got hammered, so I took advantage and sold covered calls on Cameco (CCJ) making a decent profit within a couple months.
Hehe, I like thinking of it as dumpster diving! Good one! I remember the Fukushima disaster well. I bought some shares of LTC when that happened and still hold most of them to this day.
Delete