Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

What equity valuation methods are most commonly used (alongside DCF)?

user-image
Question added by Arben Kacanolli , Accounting, Finance, and Marketing Intern , Center for Community Innovation
Date Posted: 2016/10/17
Rashid Alkanhal
by Rashid Alkanhal , Director of Local Content Department , Ministry of Commerce and Industry

actually, the market approach is used more offen than even DCF in equity research reports

Deleted user
by Deleted user

Public comps, M&A comps and LBO.

Musharraf eqbal
by Musharraf eqbal , Financial Analyst, Financial Modeling , ZamZam FinancialTech

EPS and Relative valuation method is commonly used in equity valuation. Ebitda used as basis for relative valuation method

Parag Shah
by Parag Shah , Sr. Technical Analyst , M/s B R Jalan Securities Pvt. Ltd

In Equity Valuations, Dividend Discount Model & Multi Stage Dividend Discount Model are also used widely. 

Ahamed Nuzhan
by Ahamed Nuzhan , Assistant Investment Manager , Jezoor General Trading & Company

Mostly relative valuations (in majority of the cases either EV/EBITDA or PE valuation) is used alongside DCF.

سارية alftanasi
by سارية alftanasi , analyste financier , MAC SA société d'intermédiaire en bourse

I think  Peers Multiple Method is the best method to evaluate equity.

shashank saurav
by shashank saurav , Senior Analyst , Acumen Aviation

usually Mutiple Approach, Asset Based , SOTP analysis is used alongside with DCF when we are performing equity valuation for the Public companies.

Hisham Eisenhower
by Hisham Eisenhower , Senior Investment Manager , Banque du caire

Relative Valuation , Asset base Valuation 

Deleted user
by Deleted user

Comps

Trading multiples or comparable companies multiple (dependent on the business, may also use sum of the parts but that also follows using comps where each division comps are separately caclulated using peers)

Comparable transactions / precedent transactions

Would also use LBO along side with it.

 

Best way is to look at a football field which you would find in any Investment Banking pitchbook

 

In my humble experience have not come across a DDM on a football field. But never say never!

More Questions Like This