Use Payout Ratios Wisely
The payout ratio is a good indicator of dividend sustainability; let me explain how to use payout ratios wisely when assessing companies as investments possibilities or investments to sell. Payout ratios in a nutshell There are different ways to calculate a payout ratio. The simplest way is the classic payout ratio. Essentially, it tells you how much of its earnings per share a company uses to pay dividends. Another widely used calculation is the cash payout ratio. While a bit …
