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The dividend payout ratio can be a helpful metric for comparing dividend stocks. This ratio represents the amount of net income that a company pays out to shareholders in the form of dividends.
The dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends: Dividend payout ratio = Dividends Net Income for the same period {\textstyle {\mbox{Dividend payout ratio}}={\frac {\mbox{Dividends}}{\mbox{Net Income for the same period}}}}
To add to the probability of future increases, Visa's payout ratio-- the percentage of earnings a company pays out as dividends -- is a paltry 21.5%, meaning it doesn't burden other capital ...
For other companies, however, a high ratio can portend trouble. If a company’s cash flow dips, it might not be able to sustain its dividend payout, resulting in a dividend cut. Dividend Coverage ...
A payout ratio greater than 100% means the company paid out more in dividends for the year than it earned. Since earnings are an accountancy measure, they do not necessarily closely correspond to the actual cash flow of the company. Hence another way to determine the safety of a dividend is to replace earnings in the payout ratio by free cash ...
When the dividend payout ratio is the same, the dividend growth rate is equal to the earnings growth rate. Earnings growth rate is a key value that is needed when the Discounted cash flow model, or the Gordon's model is used for stock valuation. The present value is given by:
Adjusted for this stock split, the current $0.01-per-share quarterly dividend is really equivalent to $0.10 per share on a pre-split basis -- more than double the previous dividend payout.
The investment thesis is centered around a growing, healthy dividend. The company targets an annual growth rate of 7% to 9% per year while keeping a payout ratio of 55% to 60%. By keeping a lid on ...