When it comes to investing, dividend payouts are an important factor to consider. Understanding dividends and how they affect stock prices is essential for any investor. In this article, we’ll explore what dividend payouts are, how they are calculated, and how they can impact your investments.
A dividend is a payment made by a company to its shareholders out of its profits. The amount of the dividend is determined by the company’s board of directors and is usually paid out quarterly or annually. Dividends are often used as a method of rewarding shareholders for their investments in the company.
When it comes to calculating dividend payouts, one of the most important factors is the company’s payout ratio. The payout ratio is the percentage of the company’s profits that are paid out as dividends. For example, if a company has a payout ratio of 50%, that means that 50% of its profits are paid out as dividends.
When you think of high-yield dividend stock, you might think of companies with payout ratios of over 50%. This means the company is spending more than 50% of its profits on dividends. However, companies with lower payout ratios can still be attractive investments. For example, a company with a 25% payout ratio is spending less than 50% of its profits on dividends, meaning that there is still room for growth.
On Tuesday, WhiteHorse Finance will go ex-dividend, meaning the stock will trade lower to reflect that payout. In other words, the stock price will likely drop on the day of the ex-dividend date to reflect the fact that the company is paying out a dividend. Similarly, Ituran Location & Control and Ecolab will also go ex-dividend on Monday and Tuesday, respectively.
WD-40 has a payout ratio of 59.5% meaning its dividend is sufficiently covered by earnings. Research analysts expect WD-40 to earn $5.98 per share this year and pay out an annual dividend of $3.60 per share. This means that WD-40’s dividend is very well covered and can be sustained even if earnings fall.
Onesource. is a research and analysis platform designed to help investor make informed decisions. It provides investor with financial data, news, and analysis on over 13,000 publicly traded companies. It also provides a dividend screener tool that can be used to find stock with high yields and low payout ratios.
On Monday, Virginia National will go ex-dividend, meaning the stock will trade lower to reflect that payout. Similarly, Broadcom will also go ex-dividend on Monday, with a $4.6 dividend payout for every share that shareholders own. Broadcom’s payout ratio is also near 50%, meaning the company's dividend is very well covered and can be sustained even if earnings fall.
Overall, understanding dividend payouts and how they affect stock prices is essential for any investor. By calculating the payout ratio and using tools like Onesource.’s dividend screener, investor can make informed decisions about which stock to invest in.
