Ddm valuation

Dividend Discount Model (DDM)

Multi-stage DDM for mature dividend-paying companies. Values a stock as the present value of all expected future dividends. Especially appropriate for financials (JPM, BAC), utilities (DUK, SO), consumer staples (PG, KO), and REITs — where dividends are the primary mechanism of shareholder returns.

Preflight

Run the canonical pre-flight sequence — MCP health probe, ticker resolution, workspace style.md override, memory load, and coverage check. See contracts/preflight.md.

Include the X-Agentii-Trace header on every tool call per contracts/x-agentii-trace-header.md.

Triggers

• dividend discount model {ticker}
• DDM valuation {ticker}
• dividend growth valuation {ticker}
• Gordon Growth Model {ticker}
• multi-stage DDM {ticker}
• income stock valuation {ticker}
• dividend yield analysis {ticker}
• value {ticker} by dividends
• mature company valuation {ticker}
• dividend-based fair value {ticker}

Defaults

Parameter	Default	Notes
stages	3	Explicit → Transition → Maturity
explicit_years	5	Years of explicit dividend forecast
transition_years	5	Years of declining growth
terminal_growth	2.5%	Long-term perpetual growth (GDP proxy)

Methodology

Retrieval Scope

structured_only — DDM uses dividend history from XBRL + current price + earnings estimates.

Retrieval Strategy

See contracts/retrieval.md for the canonical decision tree; skill-specific retrieval detail is in references/methodology.md.

Temporal Scope

Default lookback: 4 fiscal quarter(s); maximum: 20. The default balances recency against the trend window this analysis requires.

Tool Allowlist

Per frontmatter allowed_tools:

• search_xbrl_facts — primary structured financial facts (is_primary default)
• get_realtime_quote — latest market price for valuation cross-checks
• search_earnings_calendar — EPS actual/estimate/surprise + report dates

Protocol

Step-by-step execution detail is in references/methodology.md.

Output File

Write the final deliverable to {ticker}/{YYYY-MM-DD_HHMM}_ddm-valuation_{affix}.md.

Output Structure

The deliverable is a structured markdown report written to the path in ## Output File. Full section-by-section template (headings, tables, and field definitions) lives in references/output-structure.md. Required elements:

1. Executive Summary — headline conclusions (≤200 words).
2. Core analysis sections — per this skill's methodology and analyst modes.
3. Data classification — tag findings [FACT] / [DEDUCTED] / [VIEW] per contracts/snapshot-synthesis.md.
4. Coverage Gaps & Citations — inline /v/ citations are PRIMARY (immediately after each fact); the bottom Citations section is a non-duplicative roll-up index.
5. Output frontmatter — emit the FR-090 structured block per contracts/output-frontmatter-schema.md.

Citations & memory: follow contracts/citation-and-memory.md — ≥1 citation per 200 words; every material fact, table row, and metric is immediately followed by its inline clickable https://agentii.ai/v/{ticker}/{citation_id}/{N} link; a bottom Citations section provides a non-duplicative roll-up index; the closing TUI reply includes a compact Key Citations list (headline 5–10 facts) of clickable /v/ URLs; and append the run to agentii.md per contracts/agentii-md-schema.md.

Validation Gates

1. Dividend consistency: DPS must be positive in ≥4 of last 5 years. If failed: flag "Dividend history insufficient for reliable DDM — consider Residual Income or DCF."
2. Growth sustainability: DPS growth rate must not exceed sustainable growth rate (ROE × (1 - Payout Ratio). If failed: flag "Dividend growth exceeds sustainable rate — imply future dilution or leverage increase."
3. Terminal value reasonableness: Terminal value must be <80% of total fair value. If failed: flag "Terminal value dominates (>80% of fair value) — model highly sensitive to terminal assumptions."

Tool Fallbacks

Per-tool failure modes and fallback actions are tabulated in references/tool-fallbacks.md.

Memory & Snapshot

• Memory load (pre-flight): load prior workspace context for the ticker before retrieval — see contracts/memory-load.md.
• Structured output frontmatter: emit the FR-090 block (key_metrics, conclusions, facts_count, deducted_count, views_count, citation_count) per contracts/output-frontmatter-schema.md.
• Snapshot synthesis: after writing the deliverable, update the two-tier snapshot and classify findings as [FACT]/[DEDUCTED]/[VIEW] — see contracts/snapshot-synthesis.md.
• Session archival: record the run under sessions/{YYYY-MM-DD}/ and update sessions/INDEX.md per contracts/session-format.md.

Final Summary (TUI)

End the closing chat reply with a compact Key Citations list (headline 5–10 facts), each a clickable https://agentii.ai/v/{ticker}/{citation_id}/{N} link, so the user can cmd+click straight to the exact SEC page. See contracts/citation-and-memory.md.

Error Handling

Failure Mode	Action	User-Facing Message
No dividend history	Halt; redirect to DCF or Residual Income	"{ticker} does not pay dividends — DDM not applicable. Use DCF or Residual Income."
Zero or negative beta	Prompt user for manual beta input	"Beta unavailable for {ticker}. Please provide beta estimate."