Some metrics which I have mentioned in my previous FA posts includes ROE, dividend yield, PE, PB but one metric which I have not talked much about is Payout Ratio.
Payout ratio is an important metric that give us a feel of how sustainable would the future dividends of a company be (related: The Dividend Trap). This metric often gets overlooked because it is not a readily available ratio (unlike PE, PB, yield) on websites and requires some manual calculations. It’s simple enough though, so we should really be taking it into account when making an investment decision. What it shows us is the net income that a company does not reinvest in the business, use to pay off debt, or add to its cash reserves (source: Investopedia).
Below is a screenshot from SGX website under the company’s Financial data of Thaibev. From there we can see the net income for a particular