Payout ratio

(redirected from Payout Rates)

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 ?
We exploit an exogenous source of variation in the payout rates of individual instant lottery games to estimate the price elasticity of demand.
At the same time, it predicted continued increase in grant making, which is already underway, and in payout rates.
ySTANBUL (CyHAN)- A recent minimum wage increase is expected to drastically increase auto insurance payout rates for accidents involving injury or death, resulting in a TL 2.
payout rates, so partners can create and register bigger Veritas transactions
Increased Opportunity Registration cap: Veritas has increased the Opportunity Registration cap from $500,000 to $1 million, while maintaining payout rates, so partners can create and register bigger Veritas transactions with their strategic customers.
As more and more boomers approach retirement age and obtain annuities to cover their basic expenses, this demand, coupled with increasing life expectancies, can have a dramatic effect on payout rates for future purchasers.
Income annuities typically provide payout rates in the 6 to 12 percent range (which includes return of premium), depending on the type of product.
Social Security payout rates can and will change at the sole discretion of the Social Security Administration.
7% for a single 65-year old, although payout rates do vary from charity to charity.
They should understand what interest rates, historically, have been credited to the product they want, as well as the payout rates of that product.
Whereas life insurers are paying out more in aggregate commissions, there is no discernible upward or downward trend in respect to payout rates on individual life products.
The annuity payment for that SPIA will almost certainly be greater than if that client had bought a SPIA initially (I say "almost certainly" because it's possible that annuity payout rates, 10 years hence, will decline by more than the increase in payout attributable to the client being 10 years older).