Payout ratio

(redirected from Payout Rate)

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 ?
This dividend is an increase of 12.5% and equals an annual payout rate of USD0.36 per share as compared to the prior annual payout rate of USD0.32 per share.
For 2019, the company has doubled the Bonus payout rate for the lowest level of performance, thereby further rewarding and incentivizing mediocre performance.
Considering the company's robust financial structure and abundant cash flow, we decided to distribute a NT$12 cash dividend, equating to a 78% dividend payout rate, to reward our shareholders.
What will happen to the bitcoin market when even the biggest and most efficient mining operators can't justify creating new tokens at an unprofitable payout rate?
Stable EBITDA contribution from the core retail business in addition to cash inflows from property would be more than sufficient to cover our estimate of CNY1 billion in annual capex, assuming a 50% dividend payout rate in-line with the historical average.
The Pakatan Harapan (PH) government will maintain the previous administration's payout rate and recipient categories, under its rebranded Bantuan Sara Hidup (BSH), formerly known as 1Malaysia People's Aid (BR1M).
He said that 22 percent of eligible members did so, a high payout rate for a consumer class action settlement.
Only 29% knew that buying an annuity is less expensive for an older person than a younger one; only 17% knew the lifetime income payout rate for a 65-year-old male is roughly 7%; and only 14% knew an annuity with a guaranteed lifetime withdrawal benefit can pay income even if the investment drops to zero.
Similarly, there are no studies currently available that assess if the government payout rate for prizes is optimal for instant tickets.
"The steady grant payout rate across economic cycles demonstrates their dedication to giving."
By comparison, the annual payout of an immediate annuity can be as high as 10 percent, depending on the buyer's age (the older the buyer, the higher the payout rate).