Dividend payout ratio (DPR)

Not so many investors talks about this metrics and DPR is considered to be a tedious measurement. It looks like an important measurement, but nobody know why. DPR measures what a company pays out to investors and money makers in the form of dividends.

You can calculate like this:

DPR = Dividends Per Share / EPS

Let`s say Company A have paid out $2 per share in annual dividends and they had $3 in EPS, the DPR is 66%. ($2/$3=66%). Younger companies have lower payouts or no dividends at all, than the older one.

The companies that is older do business in mature industries that is still growing and therefore can pay out higher dividends which is the best use of their profits. But again, you cannot look on this measurement isolated, but in relationship to other tools and in context of the company`s industry.


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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