Dividend info?

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date Dividend info? W. Wells 03-14-2008  Re: Dividend info? Douglas Johnson 03-14-2008  Re: Dividend info? joeu2004 03-14-2008  Re: Dividend info? Elle 03-14-2008  Re: Dividend info? dapperdobbs 03-15-2008  Re: Dividend info? Elle 03-16-2008  Re: Dividend info? jIM 03-14-2008  Re: Dividend info? dapperdobbs 03-15-2008
Posted by Elle on March 16, 2008, 7:20 pm > Note to Elle: sorry you had difficulty with the link I put > up (it > seems like two links got posted somehow). Did you notice > the headlines > about Bear Stearns today? Even guys with AAA mortgages > can't find a > market for them, Sure but none of this is a surprise, IMO. You called all this a "black swan" event, which suggests unforeseeablity. I call it foreseeable, based in part on the past but also on the presence of much inappropriately based credit. (I did not foresee it, but from general reading it seems a number of people like Buffett and Robert Shiller did.) ======================================= MODERATOR'S COMMENT: Posters to this thread should relate comments to general financial planning. -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by jIM on March 14, 2008, 5:08 pm > Where is a good place to check the ability of a company to continue paying > its dividend? I think the metric is payout ratio- percent of profits paid out. The lower the better, with some latitude (maybe not as low as possible, but if a company pay out 50 cents of every dollar of profit, there is a possibility that lack of reinvestment into the business will hurt the dividend down the line). I would also look for dividend history- some stock charts show how often the dividend price changes over time. -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by dapperdobbs on March 15, 2008, 1:19 pm Good point you make. I believe the general rule of thumb is that younger rapidly growing companies redeploy capital into the business, then at some point when growth prospects slow, initiate a dividend. As the business matures, more money may be paid out, and a 50% payout ratio is not unusual. Payout ratios also vary by industry, generally by the stability or predictability, of revenues. Another way of saying that is inelasticity of demand. 'Inelastic' means in good times or bad, people will still demand products such as electricity, water, and food, but may put off buying a new car (or new house). Today's mess with incentive options and stock buybacks makes the dividend picture a little more difficult, but the rate of increase in dividends is significant, and any increase is predicated upon an increase in earnings. IMO you are correct about the importance of the payout ratio. It is likely that the payout ratio will vary more than the actual dividend, as earnings fluctuate, but a 50% ratio is probably a really good ballpark number. > > > Where is a good place to check the ability of a company to continue paying > > its dividend? > > I think the metric is payout ratio- percent of profits paid out.  The > lower the better, with some latitude (maybe not as low as possible, > but if a company pay out 50 cents of every dollar of profit, there is > a possibility that lack of reinvestment into the business will hurt > the dividend down the line). > > I would also look for dividend history- some stock charts show how > often the dividend price changes over time. > -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Similar Threads Posted More info on Piggybacking June 29, 2007, 4:59 am IRA Basis Info? April 15, 2008, 5:40 pm Help info on buying into a business April 14, 2008, 12:14 pm Finding info on bank's subprime exposure? January 9, 2008, 3:04 pm Source of info on long term care insurance October 24, 2006, 7:20 pm Where to invest for dividend? March 21, 2007, 4:53 am Buy bank stocks w/8.5% dividend? January 20, 2008, 12:06 pm Taxes on stocks and dividend reinvestment plans April 16, 2007, 12:29 pm