Dividend payout ratio

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Dividend payout ratio

Percentage of earnings paid out as dividends.
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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.
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dividend payout ratio

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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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References in periodicals archive ?
Overtime we expect to build to a regular dividend pay-out ratio in the order of 40%.
Under this adjustment, Pandox's new target is a dividend pay-out ratio of 30% to 50%, as compared with the prior 40% to 60%, of total cash earnings, with an average dividend pay-out ratio over time of approximately 40%, instead of the previous 50%.
Historically the interim dividend pay-out ratio has been approximately 40 percent.
Dividend pay-out ratio maintained at 50 to 80 per cent of net profit after tax of full year earnings.
Dividend pay-out ratio was considered a measure of the company paying dividend.
After conducting the factor analysis, multiple regression was done on the factor scores as independent variables and the dividend pay-out ratio of 2016 as the dependent variable.
Large market capitalisation, and high PAT indicate high market values and profitability increasing the dividend pay-out ratio of the company.
Since all factors considered above have a positive sign while generating the factor score and the combined impact of all factors is considered to be positively related to dividend pay-out ratio, hence the expected sign of the factor is positive.
RRE and pay-out ratio are correlated to the factor and dividend pay-out ratio in the same way.
return on net worth and dividend pay-out ratio of previous year.
The apex bank added that banks that meet the minimum Capital Adequacy Ratio (CAR) but have a CRR of 'Above Average' or an NPL ratio of more than 5 percent but less than 10 percent would have a dividend pay-out ratio of not more than 30 percent.
Dividend pay-out ratios are high by international standards and the four banks propose to distribute between 70% and 75% of 2015's net income to shareholders.