How to value dividend-paying shares

With the economy still fragile, high-yielding blue-chips are in hot demand. That can make them expensive. So how can you make sure you're not paying too much? Tim Bennett explains.

With interest rates low and the economy fragile, dividend-paying, blue-chip stocks are in demand. But with yield-hungry investors driving up prices, how can you make sure you don't pay too much?

The Gordon growth model

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.