International evidence on the payout ratio, earnings, dividends, and returns
International evidence on the payout ratio, earnings, dividends, and returns
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.
portfolio management, asset allocation, equity investments, fundamental analysis and valuation models
36-53
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
2006
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
(2006)
International evidence on the payout ratio, earnings, dividends, and returns.
Financial Analysts Journal, 62 (1), .
(doi:10.2469/faj.v62.n1.4057).
Abstract
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.
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Published date: 2006
Keywords:
portfolio management, asset allocation, equity investments, fundamental analysis and valuation models
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Local EPrints ID: 37357
URI: http://eprints.soton.ac.uk/id/eprint/37357
ISSN: 0015-198X
PURE UUID: fd0b8ab2-5071-4cd0-9197-d7b3f73ebb70
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Date deposited: 20 Jun 2006
Last modified: 15 Mar 2024 07:58
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Author:
Owain ap Gwilym
Author:
James Seaton
Author:
Karina Suddason
Author:
Stephen Thomas
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