Model Comparison Matrix
Comprehensive Valuation Model Comparison
No single valuation model fits every company. Selecting the right methodology based on financial predictability, asset intensity, and dividend policy is the key to sound analysis.
| Model | Best Suited For | Key Inputs | Filing Source | Complexity | Key Limitations | Action |
|---|---|---|---|---|---|---|
S-RIM 사경인 CPA / Ohlson (1995) | Profitable firms with stable book equity & ROE | Book equity, forward ROE, required return | Balance Sheet + Income Statement | Low (Easy) | Not for unprofitable or negative equity firms | Calculate |
DCF Aswath Damodaran / McKinsey & Co. | Predictable cash flows in non-financials | Explicit FCFFs, WACC, terminal growth, net debt | Cash Flow Statement + WACC | High (Advanced) | Not for banks; high assumption sensitivity | Calculate |
Graham Benjamin Graham (1974) | Defensive value stocks with solid assets & profit | EPS, BVPS, expected growth, bond yield | Income Statement + Balance Sheet + Bond Yield | Low (Simple) | Heuristic limits on modern high-growth tech | Calculate |
NCAV Benjamin Graham (1934) | Deep value liquid micro-caps & asset plays | Current assets, total liabilities, preferred | Balance Sheet Working Capital | Very Low (Simple) | Value trap risk if burning operating cash | Calculate |
DDM Myron J. Gordon (1956) / Fuller & Hsia (1984) | Banks, insurers, REITs, dividend compounders | DPS, cost of equity, dividend growth | Dividend Filings + Cash Flow | Medium | Useless for non-dividend tech companies | Calculate |
Peter Lynch Peter Lynch | 10-25% growth compounders with net cash | EPS, growth rate, dividend yield, net cash | Income Statement + Balance Sheet | Low (Simple) | Unsuitable for hyper-growth non-profitable tech | Calculate |
EPV Bruce Greenwald (Columbia University) | Moated cash cows with no speculative growth | Normalized EBIT, maintenance CapEx, WACC | Income Statement + CapEx Reconciliation | Medium | Excludes all upside from future expansion | Calculate |
Multiples Aswath Damodaran / Liu, Nissim & Thomas (2002) | Standard companies with clear peer comparables | EPS/BPS/EBITDA, peer median multiple | Market Pricing Multiples + Statements | Low (Fast) | Reflects market bubbles; not pure intrinsic | Calculate |
Intrinsic vs. Relative Valuation
Intrinsic models (S-RIM, DCF, EPV) price a firm based on fundamental equity and cash generation capability. Relative multiples benchmark against current market prices, which may reflect sector-wide overvaluation.
Where Should I Start?
For profitable operating companies, start with the S-RIM or Peter Lynch PEG model. Use DCF for mature companies with clear CapEx forecasts, and DDM for banks and dividend aristocrats.
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