Is the Dividend Payout of Indian Companies Set to Double? - Chart Of The Day 15 May 2018 - Equitymaster

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Is the Dividend Payout of Indian Companies Set to Double?
May 15, 2018

Going by historical trend, there is an inverse relation between valuations and dividend payouts.

The years like FY09 and FY13, saw the dividend payout ratios of BSE-500 companies go to as high as 25%. Incidentally, these were the years in the past decade, which were the best suited for value investing (buying great businesses at deep discount).

So, as I explained, when interest rates act like a force of gravity on valuations, we could see a repeat of 2009 and 2013 like correction. A 30% crash from the peak is something I have been predicting for few months now.

And I won't be surprised, if the dividend payout ratio doubles from the current level.

Data Source: Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - The Big Change You Need to Make to Be the Investor of the Next Decade

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