International evidence on the payout ratio, earnings, dividends, and returns

ap Gwilym, Owain, Seaton, James, Suddason, Karina and Thomas, Stephen (2006) International evidence on the payout ratio, earnings, dividends, and returns. Financial Analysis Journal, 62, (1), 36-53. (doi:10.2469/faj.v62.n1.4057).


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Recent evidence for the U.S. market has shown that, contrary to popular wisdom, the greater the proportion of earnings paid out as dividends, the greater the subsequent real earnings growth. This study extends previous work by examining whether a similar relationship exists in 11 international markets and by considering the role the payout ratio plays in explaining future real dividend growth and returns. Higher payout ratios do indeed lead to higher real earnings growth—but not to higher real dividend growth. This information has limited use, however, for predicting future returns.

Item Type: Article
Digital Object Identifier (DOI): doi:10.2469/faj.v62.n1.4057
ISSNs: 0015-198X (print)
Related URLs:
Keywords: portfolio management, asset allocation, equity investments, fundamental analysis and valuation models
Subjects: H Social Sciences > HG Finance
H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Divisions : University Structure - Pre August 2011 > School of Management
ePrint ID: 37357
Accepted Date and Publication Date:
Date Deposited: 20 Jun 2006
Last Modified: 31 Mar 2016 12:06

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