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If a company has a solid history of paying consistent dividends, either steady or increasing at a steady known pace, you can model the value of these dividend payments in perpetuity using the dividend discount model.
The present value of these dividends should be close to the stock price today.
In practice there are many complications to doing this:
- It calls for making future projections which are going to be inaccurate
- Interest rates are uncertain and depend on many other factors. Risk free interest rate or some variant of it is generally used as the discount rate for PV calculations
- Of course, the dividends are not entirely risk free. The company may be solid today, tomorrow you can’t tell. New competition comes in, products become obsolete, management deteriorates, etc.
Please note that bonds have a little less of these uncertainties as they present a more senior claim on the company assets. A company can suspend a dividend if it needs to without any existential threat to the company. Missing an interest payment on a bond can quickly put the company on the path to bankruptcy.