The bigger the dividend payouts get, the faster they get bigger.
The U.S. rate hike that the market is 100 percent certain will be delivered this week did not stop Dividend Equity Funds from recording their biggest inflow since the record setting $ 9.4 billion they took in exactly three years ago, with investors translating recent earnings per share growth and expected repatriation of foreign cash piles into
bigger dividend payouts.
Not exact matches
Now, the
payout ratio has expanded as the company went from a small
dividend to a
big one.
The
big surprise this month was another unexpected
dividend payout from HQL, this time paying 82 cents per share (Yeaaaahh!).
That growth rate is on the higher end of what I usually allow for, but I think Amgen's quality, position, growth prospects, pipeline,
payout ratio, and penchant for handing out
big dividend raises puts a lot of confidence in that model.
This company has been high on my list for one reason: great EPS growth + low
payout ratio =
big time
dividend growth.
Now, the
payout ratio has expanded as the company went from a small
dividend to a
big one.
With profit growth like that, it's no wonder many
big banks are boasting low
payout ratios (the percentage of earnings headed out the door as
dividends) these days, like JPMorgan Chase & Co. (JPM), whose ratio (orange line below) sits at an ultra-safe 36.8 % as I write, even as management has cranked up the
dividend by 40 % in just the past 4 years (blue line):
A
big factor in
dividend growth is to keep
dividends to a manageable percentage of net income, which is known as the
payout ratio.
Source: Simply Wall St. Related Articles: -
Dividend Stocks in Today's Market - 5
Big - Name
Dividend Stocks Crushing The S&P 500 - How To Be a Better Investor During Difficult Times - 4 Higher - Yielding, Low Debt Stocks With A Tiny
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Dividends Like A Champion
There are a few points made about the tax advantages of whole life and potential
dividend payouts but the
biggest eye opener of the article is the data: