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Author: hlmeans Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 2771  
Subject: Payout Ratio Date: 2/1/2010 8:33 PM
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Not sure if this is the right spot to post, but I couldn't find a dividend based board, maybe it is listed under another name, if not maybe fool.com could establish one. Anyways, I invest mainly with dividend based companies, and have been looking at the payouts of the companies I invest with and came upon something that strikes me as odd, their payout ratios are 100%+. How does this make sense? I have read that I want to invest in companies that have a payout ratio of 75% or less. But for example VZ, it's payout ration is 144%. So, obviously anything above 100% means they are dipping into cash reserves, correct? If that is the case, is there a high potential for the dividend to be lowered? Realty Income, O, also known as the monthly dividend company is at 179%, but is rated a "Buy" by thestreet.com. How in the world is a company that is paying out close to twice what it is bringing in per share a buy? Am I reading the numbers wrong?
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