# 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.

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.

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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.
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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.

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