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Gordon Growth Model
Dividend Valuation · Intrinsic Value · Implied Growth Rate
Tick ASX for Australian tickers or NSE / BSE for Indian tickers. Leave unticked for US (e.g. AAPL).
Not financial advice. GGM assumes constant perpetual growth — verify all inputs against the company's actual dividend history.
The Gordon Growth Model (GGM) values a dividend-paying stock by assuming dividends grow at a constant perpetual rate. Enter any ticker to pull live data from Yahoo Finance, then run three scenarios — Bear, Base, and Bull — to see intrinsic value and margin of safety across your growth assumptions.
The Reverse GGM flips the formula: given today's price, it solves analytically for the implied growth rate the market is already pricing in. This is one of the fastest ways to sanity-check whether a stock is cheap or expensive on a dividend basis — if the implied rate looks unrealistic, the market's pricing warrants scrutiny.
For ASX stocks, cost of equity defaults to a sector-specific range (more reliable than Yahoo's 5-year beta against the S&P 500 for Australian shares), with an optional franking credit adjustment. US and other markets use standard CAPM.
The GGM values a stock as the present value of all future dividends, assuming they grow at a constant perpetual rate. The formula is: Intrinsic Value = D₁ / (Ke − g), where D₁ is next year's dividend, Ke is the required return (cost of equity), and g is the perpetual growth rate. It works best for mature, stable dividend payers where the constant-growth assumption is defensible.
By rearranging the GGM formula, you can solve for the growth rate implied by today's market price. If the implied rate looks unrealistically high (e.g. above 8% in perpetuity), the stock is likely expensive on a dividend basis. If it's near-zero or negative, the market is pricing in pessimism you may disagree with. It's a quick, intuition-building check rather than a full valuation.
GGM works best for mature, dividend-paying companies with a stable payout history — large-cap financials, utilities, consumer staples, and REITs. It is not suitable for growth stocks that pay no dividend, or for highly cyclical sectors like Basic Materials and Energy where dividends swing with commodity prices (the tool flags these). For non-dividend payers, use the DCF tool instead.
Completely free, no sign-up required. No personal data is collected or stored. The only data sent externally is the ticker symbol, forwarded to Yahoo Finance via a Cloudflare Worker proxy. All calculations run in your browser.