Showing posts with label Tools. Show all posts
Showing posts with label Tools. Show all posts

Friday, August 23, 2013

Simple Stock Valuation Tool

This simple stock valuation tool is what I use to calculate a rough estimate of the return I would expect from an investment given the current price and some simple financial statistics about the company.

I should stress that even though the estimated return looks precise, it is necessarily based on figures which will prove more and more in-accurate as we look further and further into the future.

I use the tool as a sanity check.  Given my assumptions about the earnings power of the company, I want to know if the company looks outrageously cheap (or expensive).  So please keep this in mind.

How to use the tool


The following inputs are required by the tool:

  • Current Price - this is the current price of the shares in dollars and cents
  • Return on Equity - this is the ROE or Return On Equity generated by the company.  This is available on more stock research websites.
  • Dividend Payout Ratio - the percentage of earnings paid out by the company as dividends
  • Earnings Per Share - the current earnings per share
  • Number of Years - the number of years over which to calculate the returns
  • End PE - this is the estimated price earnings ratio the company will trade on at the end of the valuation period
Please note: the tool is still very rough.  Let me know if it is at all useful and I will polish it up a little.


Year EPS Dividend Share Price
{{result.year}} {{result.eps | currency}} {{result.dividend | currency}} {{result.price | currency}}
Total Return: {{totalReturn | number:1}}%
Annualized Return: {{annualReturn | number:1}}%