Gordon · Single-stage dividend growth model
Assumes dividends grow at a single perpetual rate and capitalizes next year's dividend directly — the most transparent baseline form of dividend discount valuation.
- Guide level
- Practical
- Output
- Intrinsic value
Core formula
Value per share = next-year dividend / (cost of equity − perpetual growth)How to interpret it
Assumes dividends grow at a single perpetual rate and capitalizes next year's dividend directly — the most transparent baseline form of dividend discount valuation.
The output should be read as a scenario or decision aid, not as a guaranteed price target. Compare it with at least one method based on different economic assumptions.
Practical workflow
- Normalize the latest public financial and operating data.
- Choose assumptions that match the company's economics and accounting structure.
- Calculate conservative, base and optimistic cases where the method permits.
- Compare the result with market pricing and an independent valuation method.
- Document the assumptions that drive the largest changes in value.
Key limitation
Extremely sensitive to the r − g spread and unusable when growth approaches the cost of equity.
How Stockinsky uses it
Stockinsky uses this framework only when the company type and available data support it. Professional valuations expose assumptions, sources and warnings instead of presenting false precision.