I continue my investing series with another statistic that can give a lot of light onto the dividend policy of a company...
EDIT: At the time this blog entry was posted I had a Youtube video here. That has been removed but I want the rest of my content to be remain. Nothing hidden no past mistakes ignored. All out in the open.
There are a lot of different ways to look at the ideas behind what a payout ratio represents. It can be based on EPS, free cash flow, free cash flow before capital expenditures, before debt is calculated in, etc.
The key point is to figure out in some way...
1: How much money the company generates.
2: How much they keep to grow the company in the future
3: How much money they have to pay as a dividend.
Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others.
I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.