This is my today posting in stockbit and substack for concept sharing, for free.
Qualitvalue Investing Dharma 103:
P/E Intrinsic
(Unorthodox Yin Yang Equilibrium State Approach formulated by Absolute Total Compounding aka zhugeliang123 )
= ROIC × DPS × ( 2 - DPS/EPS )
Business Potential is maximized when DPS goes to zero extreme to maximize cash reinvestment, resulting shareholders to receive zero dividends.
Shareholders receive maximum dividends when 100% of EPS is converted into DPS, resulting Business Potential to be mininized due to zero cash reinvestment.
This is called Yin Yang Phenomena between EPS & DPS in the “Business Potential Vs Shareholder's Interest Realm” in relation to the Cash Reinvestment.
The formula is devised to derive Yin Yang Equilibrium State of both sides of EPS and DPS.
How do we decide the fair P/E for high dividend stock?
We don't want to buy overvalued stock with high 8% DY to avoid earning 8% dividends and stock price drops 17% in a year.
The calculation’s formula is open sourced and standardised for these types of numbers.
Qualitvalue Investing Dharma 103:
P/E Intrinsic
(Unorthodox Yin Yang Equilibrium Approach formulated by Absolute Total Compounding aka zhugeliang123 )
= ROIC × DPS × ( 2 - DPS/EPS )
This is my today posting in stockbit and substack for concept sharing, for free.
Qualitvalue Investing Dharma 103:
P/E Intrinsic
(Unorthodox Yin Yang Equilibrium State Approach formulated by Absolute Total Compounding aka zhugeliang123 )
= ROIC × DPS × ( 2 - DPS/EPS )
Business Potential is maximized when DPS goes to zero extreme to maximize cash reinvestment, resulting shareholders to receive zero dividends.
Shareholders receive maximum dividends when 100% of EPS is converted into DPS, resulting Business Potential to be mininized due to zero cash reinvestment.
This is called Yin Yang Phenomena between EPS & DPS in the “Business Potential Vs Shareholder's Interest Realm” in relation to the Cash Reinvestment.
The formula is devised to derive Yin Yang Equilibrium State of both sides of EPS and DPS.
It can replace the DDM Model.
With this unorthodox formula, the P/E is fair enough for extremely High Dividend Yield situation.