International evidence on payout ratio, returns. earnings and dividends
International evidence on payout ratio, returns. earnings and dividends
Recent US evidence has shown that, contrary to popular wisdom, the greater the proportion of earnings paid out as dividends, the greater the subsequent real earnings growth. We extend previous work by examining whether a similar relationship exists in eleven international markets as well as considering the role payout ratio plays in explaining future real dividend growth and returns. Higher payout ratios do indeed lead to higher real earnings growth, although not to higher real dividend growth. Despite the ability to anticipate earnings growth, we find limited use for this to predict future returns.
University of Southampton
Ap Gwilym, Owain
dbd356d9-b22d-420b-a980-7341f6d52f34
Seaton, James
b6f37ca8-95a5-4d2b-8f85-33061f2afc7b
Suddason, Karina
554e90b2-5f82-4bac-8b94-a1cf404a78d2
Thomas, Stephen
3ebf2346-25f1-4f19-b854-7a7da0cee9ca
2004
Ap Gwilym, Owain
dbd356d9-b22d-420b-a980-7341f6d52f34
Seaton, James
b6f37ca8-95a5-4d2b-8f85-33061f2afc7b
Suddason, Karina
554e90b2-5f82-4bac-8b94-a1cf404a78d2
Thomas, Stephen
3ebf2346-25f1-4f19-b854-7a7da0cee9ca
Ap Gwilym, Owain, Seaton, James, Suddason, Karina and Thomas, Stephen
(2004)
International evidence on payout ratio, returns. earnings and dividends
(Discussion Papers in Accounting & Finance, AF04-23)
Southampton, UK.
University of Southampton
35pp.
Record type:
Monograph
(Discussion Paper)
Abstract
Recent US evidence has shown that, contrary to popular wisdom, the greater the proportion of earnings paid out as dividends, the greater the subsequent real earnings growth. We extend previous work by examining whether a similar relationship exists in eleven international markets as well as considering the role payout ratio plays in explaining future real dividend growth and returns. Higher payout ratios do indeed lead to higher real earnings growth, although not to higher real dividend growth. Despite the ability to anticipate earnings growth, we find limited use for this to predict future returns.
More information
Published date: 2004
Additional Information:
ISSN 1356-3548
Identifiers
Local EPrints ID: 36388
URI: http://eprints.soton.ac.uk/id/eprint/36388
ISSN: 1356-3548
PURE UUID: 796d7daf-8e81-4c5a-b8dd-f8e02f49e464
Catalogue record
Date deposited: 24 May 2006
Last modified: 15 Mar 2024 07:56
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Contributors
Author:
Owain Ap Gwilym
Author:
James Seaton
Author:
Karina Suddason
Author:
Stephen Thomas
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