In yesterday's post I floated the alternative view that high dividend payouts lead to better earnings for a company. Today I thought I would show some of the residual facts and figures I found when researching yesterday's topic. I have included some data on the average dividend payout ratios for various types of companies, the decline of dividend payout ratios for the S&P 500 over time, and other various statistics about the dividend payout ratio. The Average Payout Ratio for Various …
High Dividend Payout Ratio = High Earnings Growth Rate
I have always been under the impression that a dividend payout ratio must not be too high because it can limit the ability of the company to grow. In fact, in my weekly dividend stock analysis posts, I look for a dividend payout ratios that are at least below 60%, preferably even lower. I have selected this target because I have believed that the lower payout ratio will provide the company with a sizable chunk of earnings to grow the business and with a lower than 60% dividend payout ratio a …
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My Current Effective Dividend Yield: General Electric
I buy dividend stocks that increase their dividends year after year. When I initially buy these stocks, I am adding them to my portfolio at a particular dividend yield. For example, when I buy a $20 stock with a dividend of $1 my dividend yield is 5%. However, the stocks I purchase are dividend growth stocks that increase their dividends year after year. As a result of these dividend increases, I often find that my effective dividend yield on these stocks increases over time. Let me provide …
Continue Reading about My Current Effective Dividend Yield: General Electric
