Dividend payout ratio

(redirected from Dividend Pay-Outs)

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 ?
Germany-based Deutsche Bank (NYSE: DB) has announced a plan to suspend dividend pay-outs for two years.
It [etisalat] is one of those solid, blue chip companies that give good dividend pay-outs, so that would trigger a lot of investors to hold the stock, especially in this very volatile period.
Remuneration Committee: Responsible for employee remuneration and dividend pay-outs.
Moody's notes that AKB's capital is declining, as rapid loan growth expands the balance sheet and relatively weak earnings and high dividend pay-outs fails to bolster capital at the same rate.
They find that many Taiwanese companies have robust balance sheets and therefore are well-positioned to pursue growth while at the same time maintaining decent dividend pay-outs to shareholders.
The total amount of dividend pay-outs to the acquired shares for the years 2012 and 2013 is MAD 6.
The global sell-off meant investors switched out of riskier stocks in favour of companies with the appeal of steady dividend pay-outs, meaning gains for just a handful of top-flight companies.
Proved a nice little earner for them, with the value of their investment having increased twelvefold, before dividend pay-outs.
Lloyds also flagged up another milestone in its return to health as it said it would hold talks with regulators in the second half of 2013 over a timetable for reviving shareholder dividend pay-outs.
programme presents a risk to Gazprom's ability to increase dividend pay-outs, as requested by the government.
The outlook for dividend pay-outs has improved markedly this year so it may be worth analysing stocks that have sufficient money on their books to sustain their annual dividend payments.