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 ?
There is a substantial payout rate, players can withdraw their real fund at any time (unlike many other sites), and all play is fair play.
Today's announcement reflects a 94% increase in the dividend payout rate over the last five years and demonstrates our commitment to return cash to shareholders while continuing to invest in profitable, long-term growth through the economic cycle.
11 per share, an increase of 10 percent, for an annual payout rate USD0.
The machines - commonly found in betting shops and offering fixed odds on games such as roulette and events - have come under fire from critics who claim they fuel addiction to gambling due to a much higher payout rate than traditional slot machines.
Among others, players can enjoy a 95% payout rate overall, scores of new games and lots of added value.
James Freeman, banking analyst, has stated that CBA would be increasing its dividend payout rate from 75 percent to 77 percent, which translates to AUD2 per share for the second half of the year.
Critics of the FOBTs say they fuel addiction to gambling due to a much higher payout rate than the old-fashioned slot machines.
FAVORABLE DEBT PROFILE: The county's debt profile remains positive, as evidenced by modest debt levels, a rapid GO bond principal payout rate and modest capital plans.
Payment of 10% of net income as pref dividends is in accordance with the charter, but the same payout rate in 2H will give only R35 ($1.
United Security's key investment argument for the IPO is the attractive payout levels in excess of 90 per cent till 2015 and capability to maintain 30 per cent payout rate post 2015, despite cash sweep programme from 2016-24.
With prizes from pounds 1 to pounds 1million, an average of one in three cards being a winner and a massive 95% payout rate, there's no better time to start playing.
First, the adjusted payout rate must be determined.