A company requires capital to grow and it can come from outside or reinvesting the remaining profits. Reinvesting the accumulated profit comes without any cost and hence is an important part of financing. Therefore, if a company distribute majority of the profits as dividend it may mean that the company has not enough avenues to grow and may be seen as a negative sign. But there are rare breed of companies which have been distributing lots of dividend to the shareholders and yet have grown in the last few years. These companies have dividend payout ratio (dividend as a per cent of profits) of more than almost 60 per cent in the last three years and still have better growth numbers.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
