Payout ratio

(redirected from Payout Rates)

Payout ratio

Generally, the proportion of earnings paid out to the common stockholders as dividends. Morespecifically, the firm's cash dividend divided by the firm's earnings in the same reporting period.

Payout Ratio

In fundamental analysis, the opposite of the plowback ratio. That is, the 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 plowback ratio in a slow-growing company and a lower one in a fast-growing company.

payout ratio

The ratio from which the percentage of net income a firm pays to its stockholders in dividends is calculated. Companies paying most of their earnings in dividends have little left for investment to provide for future earnings growth. Stock of firms with high payout ratios appeals primarily to investors seeking high current income and limited capital growth. Also called dividend payout ratio. See also dividend coverage, retained earnings.

Payout ratio.

A payout ratio, expressed as a percentage, is the rate at which a company distributes earnings to its shareholders in the form of dividends.

For example, a company that earns $5 a share and pays out $2 a share has a payout ratio of 2 to 5, or 40%.

A normal range for companies that do pay dividends is 25% to 50% of earnings. But the percentage may vary if a company keeps the amount of its dividend consistent with past dividends regardless of a drop in its earnings.

References in periodicals archive ?
The survey includes the advertised payout rates for premium rate numbers in 201 country codes with 8,642 different premium rate number products.
As more and more boomers approach retirement age and obtain annuities to cover their basic expenses, this demand, coupled with increasing life expectancies, can have a dramatic effect on payout rates for future purchasers.
Social Security payout rates can and will change at the sole discretion of the Social Security Administration.
A new payout rate tool is now available from Drewberry Insurance showing the payout rates across eleven different providers for income protection, critical illness insurance and life insurance.
The annuity payment for that SPIA will almost certainly be greater than if that client had bought a SPIA initially (I say "almost certainly" because it's possible that annuity payout rates, 10 years hence, will decline by more than the increase in payout attributable to the client being 10 years older).
Actually, it's a way to boost payout rates in a low interest world.
Mr Fingleton said PPI payout rates were out of line with average insurance payouts, indicating prices are too high.
If these expectations are actually realized over time, the payout rates determined at the point of entry will remain constant.
7 percent up from that in the previous fiscal year, but the increase was the second smallest recorded, mainly due to revised health insurance policies that reduced payout rates.
Net investment income yields and rates of total return on assets fluctuated throughout the period, while median payout rates, which compare charitable outlays to net investment assets, remained close to the required 5 percent.
Much of the improvement has some through stronger earnings and lower dividend payout rates, while other gains have come from new equity issues.
The company announced today an increase in joint payout rates for The Nationwide Lifetime Income Rider[R] (Nationwide L.