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User 283977 » Comments » ACAS

  • Don't Chase High Yielding Stocks Blindly [View article]
    I agree with you DividendMachine. Great article on good investing practices. The dividend payout ratio is equal to the yearly dividend per share divided by the earnings per share. This article provides a useful guideline for that number. For standard equities, 50% is the guideline. For example, today, BAC's stock dropped to 10.65. Its dividend payout ratio is now at 223%. A signal that the dividend yield is putting pressure on the stock.

    There are lots of places where you can just enter the stock and look up its dividend payout ratio. For example: www.dividendinvestor.c.../

    This site also provides the dividend payout ratio 5 year average. That lets you compare the stocks historical dividend payout ratio with its current value. BAC's 5 year dividend payout ratio is 50%. This gives a good picture of the pressure on that dividend at todays stock price. For BAC, the stocks price decrease has increased its dividend payout ratio by a factor of 4.5 times…. these are tough times for financials…
    Jan 14 17:05 pm |Rating: +5 0 |Link to Comment
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