Ratio Analysis
Dividend Payout Ratio
| = |
Yearly Dividend
per Share |
 |
| Earnings per Share |
Indicates the proportion
of earnings that are used to pay dividends to shareholders.
| Things to remember |
- A reduction in dividends paid
is looked poorly upon by investors, and the stock
price usually depreciates as investors seek other
dividend paying stocks.
- A stable dividend payout ratio
indicates a solid dividend policy by the company's board of directors.
|
[Click
on the button above to see the financial statement] |
Dividend Payout Analysis:
Cory's Tequila Co. dividend payout ratio is zero, in other words
they do not pay a dividend to its shareholders. This is the
case for most high growth firms, their profits are better spent
by reinvesting in the firms activities rather than as a cash
payout to shareholders. In fact a majority of corporations have
elected to pay out less of their earnings as dividends, perhaps
because corporate rates of return on reinvested capital are
higher these days, but it could also be that dividends are doubly
taxed in some jurisdictions.
|
Previous
