Last Updated on November 4, 2022 by admin
There are three main methods that can be used in order to value a company – the discounted cash flow model (DCF), the price-to-earnings ratio (P/E ratio), and the dividend discount model (DDM).
The DCF model takes into account the present value of future cash flows in order to come up with a current value for the company. This method is difficult to use because it relies on accurate predictions about the future cash flows, which can be difficult to do. The P/E ratio simply takes the share price and divides it by the earnings per share. A high P/E ratio could mean that the stock is overvalued or that there is potential for high growth in the future. The DDM equation uses dividends in order to come up with a current value for the stock.
After doing some research, it appears that Nikon’s P/E ratio is 16.29 and its dividend yield is 1.24%. Based on these two ratios alone, it seems as though Nikon’s stock might be undervalued. However, other factors need to be taken into account such as industry trends, company history, etc.