Feb 08 2009
Make Extra Money with Stock Dividends(Part 11)
This is part eleven of a series on how to make extra money with stock dividends. We have just reviewed the yields of stocks in my portfolio and we will look at a measure for determining whether a stock’s yield is sustainable in this post.
A stock’s dividend payout ratio is a common measure used when determining whether a stock’s yield is sustainable. The dividend payout ratio is determined by taking a stock’s annual dividends per share and dividing them by the earnings per share. For example if a stock had earning per share of $4 and paid out $1 in dividends for the year the dividend payout ratio would be 25%. In the next post we will look at how you can use the dividend payout ratio.
