Dividend payout ratio

(redirected from Dividend Payout)

Dividend payout ratio

Percentage of earnings paid out as dividends.

Dividend Payout Ratio

In fundamental analysis, the opposite of the plowback ratio. That is, the dividend payout ratio is a company's dividends paid to shareholders expressed as a percentage of total earnings. A higher ratio indicates that a company pays more in dividends and thus reinvests less of its earnings into the company. Whether or not this is desirable depends on the rate of growth; investors tend to prefer a higher payout ratio in a slow-growing company and a lower one in a fast-growing company.

dividend payout ratio

Dividend payout ratio.

You can calculate a dividend payout ratio by dividing the dividend a company pays per share by the company's earnings per share. The normal range is 25% to 50% of earnings, though the average is higher in some sectors of the economy than in others.

Some analysts think that an unusually high ratio may indicate that a company is in financial trouble but doesn't want to alarm shareholders by reducing its dividend.

References in periodicals archive ?
53% of the factors that determine the dividend payout for the firms analyzed.
For the first quarter 2003, the company's dividend payout ratio on FFO was 68.
Although dividend payouts are generally smaller for repurchasing firms, as compared to their industry peers, the dividend payout ratios increase once the stock buyback program is over.
In doing this, a company should avoid a dividend payout that is too high, in part because a high payout ratio reduces its financial flexibility and increases the risk of a ratings downgrade and/or dividend reduction.
Such a program (which would also require legislation to eliminate double taxation of corporate profits through deductibility of dividend payouts and to require full dividend payout of profits on the part of any corporation wishing to participate) would also provide a more secure asset for the Federal Reserve system to purchase as backing for the money supply than securities backed by homes.
We use the regression equation below as the basis for testing our hypothesis of a relationship between the NOC of a firm and its dividend payout.
The long-term debt payment, dividend payout and reinvestment ratios provide further insight for investors and creditors into the individual importance of these three components.
This represents an increase of 8 percent from the previous quarterly dividend and will result in a 2 percent increase to the annual dividend payout for the year 2009 and a 6 percent increase to the annual dividend payout for the year 2010.
Underscoring that pledge, MassMutual s Board of Directors has approved an estimated dividend payout of $1.
With its 2015 dividend payout, the company expects to again lead the industry in total life and disability insurance dividends paid.
We first established our dividend payout policy using financial metrics in the 1980s to make our dividend payout increases more consistent.
In the earnings and dividend payout projections, Nikko Cordial said it has taken into account the effects of its accounting irregularities, which tarnished its corporate image and led the Financial Services Agency to impose its largest ever fine of 500 million yen on the brokerage.