Dividend payout ratio

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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 ?
The firm had put a hold on dividend pay-outs since 2008.
During the period, Pakistan Credit Rating Agency Limited (PACRA) has upgraded the long-term credit rating of the Company to AA+ and maintained the short-term rating at A1+, which is a testament to the Company's strong balance sheet and robust performance with consistent dividend pay-outs.
SECP recently introduced 'The Companies (Distribution of Dividends) Regulations 2017' which spell out the method and requirements for making dividend pay-outs electronically.
SECP recently introduced The Companies (Distribution of Dividends) Regulations-2017 which spell out the method and requirements for making dividend pay-outs electronically.
Other studies on emerging market economies include by Khalid and Rehman (2015) which advocated that ownership structure plays a significant role in determining the dividend pay-outs and firms with large outside shareholdings have a tendency to pay higher dividends.
BofA Merrill Lynch raises its 2017-19 EPS estimates 11 per cent and its PO to SAR75/share on the back of: (1) Stronger volume growth as we expect Al Rajhi to benefit from the underpenetrated KSA consumer banking market (2) Higher NIMs as BofA Merrill Lynch lowers its cost of funding estimates (3) Lower cost of risk as asset quality deterioration less acute than expected; and (4) Higher ROEs on stronger earnings and a sustained increase in dividend pay-outs.
The higher the ratio, the more the company can afford to sustain its dividend pay-outs. A lower ratio means a dividend cut is more likely if profits fall.
In addition, buy-back of own shares and/or extraordinary dividend pay-outs will be evaluated on a case-by-case basis.
"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. Day to day management of Oak Ridge will be vested in the company s management.
The total amount of dividend pay-outs to the acquired shares for the years 2012 and 2013 is MAD 6.2 billion (equivalent to Euro 555 million) out of which MAD 5.7 billion (equivalent to Euro 507 million) is to Etisalat.
The total amount of dividend pay-outs to the acquired shares for the years 2012 and 2013 is MD6.2 billion ($755 million) out of which MD5.7 billion is to Etisalat.