Using two companies you chose for your 1st assignment, you should answer the following questions. Please make
Question:
Using two companies you chose for your 1st assignment, you should answer the following questions. Please make sure that you should show your work to earn credit.
1. Using the past dividend payout information between 2016 and 2020, compute the growth rate (g) for these companies. Your companies must have a complete history of dividend payout during these periods. You can find such information atwww.dividendinformation.com. If your company lacks the dividend payout information, you need to select a new company (40 points).
2. First, let’s assume that the required return (R) is 10% for all these companies. Using R, dividend information, and growth rate (g) from question 1, compute the stock prices of these companies. Second, let’s assume that the required return (R) is 20% for all these companies. Using R, dividend information, and growth rate (g) from question 1, compute the stock prices of these companies (40 points). 3. Compare your estimated stock prices with actual stock prices as of January 4, 2021. Then tell me whether each stock is undervalued or fairly-valued or overvalued based on your estimation. What’s your decision if you hold these stocks? What’s your decision if you don’t hold these stocks? (20 points)
The names of the two companies I chose were Bank of Nova Scotia and Newtek Business Services Corp
Bank of Nova Scotia is one of North America's premier financial institutions and Canada's most international bank. They offer a diverse range of products and services including personal, commercial, corporate and investment banking. Scotiabank has built long-term value and recorded consistent earnings growth by building on its core strengths and by executing exceptionally well in its core businesses. These include Domestic Banking, Wealth Management, International Banking and Scotia Capital.
Last update 09/20/2021Top Dividend Paying Stock
Dividend Yield Summary | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | ||||
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BNS | Bank Of Nova Scotia | 5.77% | ||||||||
Dividends | 2.22 | 3.33 | 3.34 | 3.51 | 3.60 | 2.70 | ||||
Average Price | 53.10 | 60.90 | 58.95 | 54.68 | 44.94 | 61.80 | ||||
Yield | 4.18% | 5.47% | 5.67% | 6.42% | 8.01% | 4.37% | ||||
• The above Dividend, Average Price, and Yield values for 2021 are year-to-date.
Dividend Dates Ex Dividend Date | 2021-07-02 |
Dividend Pay Date | 2021-10-27 |
DivInfo Metrics ™
52-Week Projected Earnings Per Share | 5.60 |
52-Week Projected Dividends Per Share | 3.54 |
Dividend Cover | 1.58 : 1 |
52-Week Projected Yield | 5.77% |
52-Week Trailing Yield | 6.28% |
6-Year Average Yield | 5.59% |
6-Year Dividend Change | 59.46% |
6-Year Yearly Dividend Change | 9.91% |
Number of Dividend Payments (2003-01-03 - 2021-07-05) | 75 |
Dividend History
Dividend HistoryDPS2003-0…2004-0…2005-1…2007-0…2009-0…2011-0…2013-0…2014-0…2015-1…2017-0…2018-0…2019-0…2021-0…0.00.51.0
Newtek Business Services Corp provides business services. Its services include financial, payroll, payment, technology and insurance solutions. It is also involved in investments in early stage companies.Reliable Dividend Paying Stock
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NEWT | Newtek Business Services Corp | 9.25% |
Last update 09/20/2021Dividend Yield Summary
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | |
Dividends | 1.93 | 1.64 | 1.80 | 2.15 | 2.05 | 2.10 |
Average Price | 12.66 | 16.74 | 19.46 | 21.51 | 17.89 | 28.28 |
Yield | 15.25% | 9.80% | 9.25% | 10.00% | 11.46% | 7.42% |
• The above Dividend, Average Price, and Yield values for 2021 are year-to-date.
Dividend Dates
Ex Dividend Date | 2021-09-17 |
Dividend Pay Date |
DivInfo Metrics ™
52-Week Projected Earnings Per Share | 2.87 |
52-Week Projected Dividends Per Share | 2.49 |
Dividend Cover | 1.15 : 1 |
52-Week Projected Yield | 9.24% |
52-Week Trailing Yield | 10.18% |
6-Year Average Yield | 10.01% |
6-Year Dividend Change | 29.02% |
6-Year Yearly Dividend Change | 4.84% |
Number of Dividend Payments (2009-12-08 - 2021-09-17) | 29 |