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 ?
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.
Reliance MF has declared as the record date for declaration of dividend under dividend payout option & direct plan-dividend payout option of Reliance dual advantage fixed tenure fund III-plan B.
Dividend payout is a crucial indicator for investors while selecting stocks.
M2 EQUITYBITES-February 19, 2015-Questar's board updates higher quarterly dividend & target dividend payout ratio
Al Masah Capital recently announced that it is offering a third consecutive $2 dividend payout for all of its investors through its Mena Dividend Fund, or MDF.
Global Banking News-July 9, 2013--CBA to increase dividend payout, says Deutsche Bank(C)2013 ENPublishing - http://www.
Consequently, we also decreased dividend payout ratios for most banks.
The ratings reflect Jindal Industries' healthy financial risk profile, notwithstanding the large dividend payout of INR526.