5.23 - Dividend Payout Ratio

This ratio is used to measure the percent of the company's earnings being returned to the stockholders.The Dividend Payout Ratio is another widely used measure of stock value particularly for those investors interested in stocks with income.It allows investors to identify companies with sufficient internal growth to possibly pay dividends in the future.A ratio between 40% and 60% would allow a company to pay a dividend while continuing to reinvest earnings in the company.

Enter the amounts, for all three periods, for Earnings Per Share and Dividend Per Share from your company's Income Statement.For each period, calculate the Dividend Payout Ratio using the following formula.

Dividend Per Share Earnings Per Share

Enter the amounts in dollars from the SEC Form 10K, for the current year, the previous year and the next previous year.Describe the trend direction for the Dividend Payout Ratio. Use phrases like: up only this year but level in previous years, consistently up, down only this year, consistently down or level for all years.Also, in your opinion is the trend positive, negative, insignificant?

Last, in your opinion, explain why the Dividend Payout Ratio for your company's stock is or is not adequate for its future.

Question 5.23 - Dividend Payout Ratio

Accounts

a= Current Yr

b= Previous Yr

c= Next Previous Yr

d= Trend Description

A

Dividend Per Share

a= $1.48

b=$1.40

c= $1.32

d=?

B

Earnings Per Share

a= $0.29

b= $1.51

c= $1.69

d=?

C

Dividend Payout Ratio

a= 5.10%

b= 0.93%

c= 0.78%

d=?

D

Why is or is not the Dividend Payout Ratio adequate for your company's stock?