Stock Valuation Calculator (Dividend Model + P/E)
Estimate a dividend stock's value two ways, with the Gordon growth dividend discount model and with earnings × a peer P/E, and blend them with a weight you choose.
Last updated: September 2026
Intrinsic Stock Value
$67.50
This calculator gives an estimate for general information only. It is not financial, tax or investment advice. Check the figures with a qualified professional before making decisions, and follow the rules that apply where you live.
Formula below · 2 sources (investor.gov, pages.stern.nyu.edu) · Updated Sep 2026
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About this calculator
This calculator values a stock two ways and blends them.
1. Dividend discount (Gordon growth) model: value = D₁ ÷ (r − g), where D₁ = this year's dividend × (1 + g) is next year's dividend, r your required return and g the dividend growth rate, assumed constant forever. It only works when r is greater than g.
2. Relative (multiple) value: EPS × the P/E ratio of comparable companies.
The result is a weighted average: weight × dividend value + (1 − weight) × P/E value. The 60% default is a choice, not a standard; set 100% to use only the dividend model or 0% for only the P/E method. The tiles show both values so you can see how far apart they are.
With the defaults ($2.50 dividend growing 5%, 10% required return, $5 EPS, 18× P/E): D₁ = $2.625, dividend value = 2.625 ÷ 0.05 = $52.50, P/E value = $90, blend = 0.6 × 52.50 + 0.4 × 90 = $67.50.
Cautions
The Gordon model is very sensitive to r − g: with r = 10%, raising g from 5% to 6% lifts the value from $52.50 to $66.25. It suits mature companies with steady dividends, not fast growers or companies that pay little. The P/E value is only as good as the peer group's P/E. Treat the output as a rough range, not a price target.
How to use
Enter the current annual dividend, its expected long-run growth rate, your required return, earnings per share, a peer P/E and how much weight to give the dividend model. Example 1 (the defaults): dividend value $52.50, P/E value $90, 60/40 blend $67.50. Example 2: $2.00 dividend, 4% growth, 9% required return, $5 EPS, P/E 18, 60% weight: D₁ = $2.08, dividend value $41.60, P/E value $90, blend 0.6 × 41.60 + 0.4 × 90 = $60.96. Example 3: the defaults with a 100% dividend weight: $52.50.
Frequently asked questions
What is the Gordon growth model?
A dividend discount model that values a stock as next year's dividend divided by (required return − dividend growth rate), assuming dividends grow at a constant rate forever. $2.10 next year, 9% required return and 4% growth: 2.10 ÷ 0.05 = $42.
Why blend it with a P/E valuation?
The two methods fail in different ways: the dividend model ignores earnings that are not paid out and is very sensitive to the growth rate, while a P/E value depends on how the market prices similar companies. Seeing both, and a blend, gives a range instead of a single fragile number. Choose the weight that reflects how much you trust each.
What required rate of return should I use?
Commonly the cost of equity from the capital asset pricing model (risk-free rate + beta × equity risk premium), or simply the return you want for the risk. Higher required returns give lower values.
Why does it say the required return must exceed the growth rate?
If g is equal to or above r, D₁ ÷ (r − g) divides by zero or a negative number, so the model breaks down. No company can grow its dividend faster than the required return forever.
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Sources & references
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