What Is a Good Payout Ratio For Dividend Stocks?

Dividend-hungry investors tend to look for the best yield they can find. It can be dangerous to get too greedy, as high yield – a big dividend relative to share price – often means taking on lots of risk. But experts say it’s wise to look at another gauge as well: dividend payout ratio, the percentage of earnings paid as dividends. The higher the figure, the greater the risk the company won’t be able to avoid a dividend cut if things go wrong. In extreme cases, firms pay out more than they earn, a red flag signaling the need for a deeper look to determine if it is a freak event or a sign of trouble like tumbling earnings…

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2018-08-30T18:31:42+00:00July 5th, 2018|Published Articles|
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