Dividend payout ratio

(redirected from Dividend Payouts)

Percentage of earnings paid out as <>.

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 addition to receiving the dividend payouts in cash, other ways whole life insurance policyowners may use the dividends include paying premiums, buying additional insurance coverage, accumulating at interest, or repaying policy loans and policy loan interest.
Finally, we decreased our fair value of SABB and SHB by 5 per cent and 9 per cent, respectively, on lower dividend payouts, but we maintain our "Accumulate" recommendation on both stocks.
Canadian banks have raised their dividend payouts following an increase in profits.
In spite of stagnant dividend payouts, a number of companies have seen an increase in dividend yields.
However, experts say one must also look at other parameters-such as earnings outlook and growth-along with dividend payouts and yields.
Soda Sterlitamak, leader on the Russian soda ash market, is about to be merged with other less efficient companies, terminating valuable dividend payouts and losing investment appeal.
Bonus dividend payouts are a true differentiator for credit unions as they compete against banks, and in a year when big banks made headlines for proposing unwanted fees, year-end member cash rewards carry even more weight for CUs looking to stand out in the marketplace.
Sustainable benchmark dividend payouts are more attractive to our shareholders than one-off stock buyback programme.
DIVIDEND payouts for investors in UK companies fell pounds 10bn last year and will continue to disappoint in 2010.
The accord requires Nikko Cordial not to spend more than 50 percent of its group net profit on dividend payouts.
Buran, Flushing Financial's President and Chief Executive Officer, stated: "Our continued strong capital position, as well as our confidence in the opportunities for future growth, underlie the Company's decision to declare quarterly cash dividend payouts to shareholders.
Savers were hit as UK companies slashed their dividend payouts by GBP10bn last year.