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Payout Ratio
The dividend payout ratio is the fraction of net income a firm pays to its stockholders in dividends: :\mbox=\frac The part of earnings not paid to investors is left for investment to provide for future earnings growth. Investors seeking high current income and limited capital growth prefer companies with a high dividend payout ratio. However, investors seeking capital growth may prefer a lower payout ratio because capital gains are taxed at a lower rate. High growth firms in early life generally have low or zero payout ratios. As they mature, they tend to return more of the earnings back to investors. The dividend payout ratio is calculated as DPS/EPS. According to Financial Accounting by Walter T. Harrison, the calculation for the payout ratio is as follows: :Payout Ratio = (Dividends - Preferred Stock Dividends)/Net Income The dividend yield is given by earnings yield times the dividend payout ratio: : \begin \mbox & = & \frac \\ & = & \frac \\ \end Co ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividends Per Share
A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex-dividend date, though more often than not it may open higher. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually by bank transfer) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets. The dividend received by a s ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Earnings Per Share
Earnings per share (EPS) is the monetary value of earnings per outstanding share of common stock for a company during a defined accounting period, period of time, often a year. It is a key measure of corporate profitability, focusing on the interests of the company's owners (shareholders),Drake, P. P., Financial ratio analysis, p. 11, published on 15 December 2012 and is commonly used to price stocks. In the United States, the Financial Accounting Standards Board (FASB) requires EPS information for the four major categories of the income statement: continuing operations, discontinued operations, extraordinary items, and net income. Calculation Preferred stock rights have precedence over common stock. Therefore, dividends on preferred shares are subtracted before calculating the EPS. When preferred shares are cumulative (i.e. dividends accumulate as payable if unpaid in the given accounting year), annual dividends are deducted whether or not they have been declared. Dividends in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividend Yield
The dividend yield or dividend–price ratio of a share is the dividend per share divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage. Dividend yield is used to calculate the dividend earning on investments. Analysis Historically, a higher dividend yield has been considered to be desirable among many investors. A high dividend yield can be considered to be evidence that a stock is underpriced or that the company has fallen on hard times and future dividends will not be as high as previous ones. Similarly a low dividend yield can be considered evidence that the stock is overpriced or that future dividends might be higher. Some investors may find a higher dividend yield attractive, for instance as an aid to marketing a fund to retail investors, or maybe because they cannot get their hands on the capital, which may be tied up in a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Earnings Yield
Earning yield is the quotient of earnings per share (E), divided by the share price (P), giving E/P. It is the reciprocal of the P/E ratio. The earning yield is quoted as a percentage, and therefore allows immediate comparison to prevailing long-term interest rates (e.g. the Fed model). Applications The earning yield can be used to compare the earnings of a specific company or group of companies across different sectors and industries against bond yields. Generally, the earnings yields of equities are higher than the yield of risk-free treasury bonds. Some of this may result in dividends, while some may be kept as retained earnings. The market price of stocks may increase or decrease, reflecting the additional risk involved in equity investments. The average P/E ratio for U.S. stocks from 1900 to 2005 is 14, which equates to an earnings yield of over 7%. The Fed model is an example of a system that uses the earnings yield as a method to assess aggregate stock market valua ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Share Repurchase
Share repurchase, also known as share buyback or stock buyback, is the reacquisition by a company of its own shares. It represents an alternate and more flexible way (relative to dividends) of returning money to shareholders. Repurchases allow stockholders to legally delay taxes which they would have been required to pay on dividends in the year the dividends are paid, to instead pay taxes on the capital gains they receive when they sell the stock, whose price is now proportionally higher because of the smaller number of shares outstanding. In most countries, a corporation can repurchase its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity; that is, cash is exchanged for a reduction in the number of shares outstanding. The company either retires the repurchased shares or keeps them as treasury stock, available for reissuance. Under U.S. corporate law, there are six primary methods of stock repurchase: o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Operating Earnings
Operation or Operations may refer to: Arts, entertainment and media * ''Operation'' (game), a battery-operated board game that challenges dexterity * Operation (music), a term used in musical set theory * ''Operations'' (magazine), Multi-Man Publishing's house organ for articles and discussion about its wargaming products * ''The Operation'' (film), a 1973 British television film * ''The Operation'' (1990), a crime, drama, TV movie starring Joe Penny, Lisa Hartman, and Jason Beghe * The Operation M.D., formerly The Operation, a Canadian garage rock band * "Operation", a song by Relient K from '' The Creepy EP'', 2001 Television Episodes * "The Operation", ''Sky Dancers'' episode 27 (1996) * "The Operation", ''The Golden Girls'' season 1, episode 18 (1986) * "The Operation", ''You're Only Young Twice'' (1997) series 2, episode 8 (1978) Shows * ''The Operation'' (1992–1998), a reality television series from TLC Business * Manufacturing operations, operation of a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividend
A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex-dividend date, though more often than not it may open higher. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-invested in the business (called retained earnings). The current year profit as well as the retained earnings of previous years are available for distribution; a corporation is usually prohibited from paying a dividend out of its capital. Distribution to shareholders may be in cash (usually by bank transfer) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or by share repurchase. In some cases, the distribution may be of assets. The dividend received by ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dividend Yield
The dividend yield or dividend–price ratio of a share is the dividend per share divided by the price per share. It is also a company's total annual dividend payments divided by its market capitalization, assuming the number of shares is constant. It is often expressed as a percentage. Dividend yield is used to calculate the dividend earning on investments. Analysis Historically, a higher dividend yield has been considered to be desirable among many investors. A high dividend yield can be considered to be evidence that a stock is underpriced or that the company has fallen on hard times and future dividends will not be as high as previous ones. Similarly a low dividend yield can be considered evidence that the stock is overpriced or that future dividends might be higher. Some investors may find a higher dividend yield attractive, for instance as an aid to marketing a fund to retail investors, or maybe because they cannot get their hands on the capital, which may be tied up in a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Liquidating Dividend
A liquidating distribution (or liquidating dividend) is a type of nondividend distribution made by a corporation or a partnership to its shareholders during its partial or complete liquidation. Liquidating distributions are not paid solely out of the profits of the corporation. Instead, the entire amount of shareholders' equity is distributed. When a company has more liabilities than assets, equity is negative and no liquidating distribution is made at all. This is usually the case in bankruptcy liquidations. Creditors are always senior to shareholders in receiving the corporation's assets upon winding up. However, in case all debts to creditors have been fully satisfied, there is a surplus left to divide among equity-holders. This mainly occurs during voluntary liquidations of solvent corporations. Cases A dividend may be referred to as liquidating dividend when a company: # Goes out of business and the net assets of the company (after all liabilities have been paid) are distribute ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Retention Ratio
Retention ratio indicates the percentage of a company's earnings that are not paid out in dividends to shareholders but credited to retained earnings. It is the opposite of the dividend payout ratio, and is a key indicator of how much profit a company is keeping to fund its operations, growth, and development. The retention ratio can be calculated using the following formula, essentially, the amount of dividends the company pays out divided by its net income In business and Accountancy, accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and Amortization (a ...: :Retention Ratio = 1 − Dividend Payout Ratio = Retained Earnings / Net Income This formula can be rearranged to show that the retention ratio plus payout ratio equals 1, or essentially 100%. That is to say that the amount paid out in dividends plus the amount kept by the c ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Special Dividend
A special dividend is a payment made by a company to its shareholders, that the company declares to be separate from the typical recurring dividend cycle, if any, for the company. Usually when a company raises the amount of its normal dividend, the investor expectation is that this marks a sustained increase. In the case of a special dividend, however, the company is signalling that this is a one-off payment. Therefore, special dividends do not markedly affect valuation or yield calculations, unless the amount is large—in which case they ''do'' markedly affect valuation as they are a direct and large depletion of the assets of the company. Typically, special dividends are distributed if a company has exceptionally strong earnings that it wishes to distribute to shareholders, or if it is making changes to its financial structure, such as debt ratio. A prominent example of a special dividend was the $3 dividend announced by Microsoft in 2004, to partially relieve its balanc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
