How much of a company's earnings is it paying out in a dividend?
The payout ratio is one of the most important metrics investors need to look at in dividend stocks. A low payout ratio means the dividend has room to grow and a company has money to reinvest in the business. Knowing this ratio could save investors a lot of headaches in dividend investing.
*Stock prices used were end-of-day prices of Nov. 25, 2022. The video was published on Dec. 1, 2022.
Travis Hoium has positions in Apple, Mgm Resorts International, and Verizon Communications. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Verizon Communications and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
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