Contact
idend ratio is an indicator of how many companies are turning to dividends.
When viewing high dividends, it is an important item to check with dividend yield.
What is dividend ratio?
idend ratio is an indicator to see how much dividends are incurred for profits.
idend ratio = 1 share dividend ÷ × 100If the dividend is 100 yen, and the share dividend is 40 yen, the dividend ratio is 40%.
Why important?
Even if the dividend yield is high, be careful if the dividend is too large for the profit.
Businesses who are making dividends can easily be decreasing when business results are decreasing.
| idend | 見方 |
|---|---|
| Too low | Possibility of shareholder return |
| Eligibility | Easy to see balance between profit and dividend |
| Too high | Beware of deduction risk |
Notes
Proper dividends vary by industry.
Growing companies can be stable even if they are high, but growth companies tend to be low because they turn funds into investments.
If you have a temporary deficit or special loss, dividends may be severely distorted.
The dividend ratio is an indicator to see the dividend.
Beginners can check dividend yield, profit, and cash flow as a set.