Net Shareholder Payout (TTM) is the amount of equity issued and dividends paid out to common stakeholders the last twelve months. This calculation is a way to grade how friendly companies are toward their shareholders. Those that return large amounts of cash to shareholders are generally viewed positively.
Companies with consistently high shareholder payouts
- Must have positive earnings that can cover dividend payments
- If company cuts dividend, stock price impact can be more pronounced
- May imply lack of investment projects
- Companies that cannot re-invest cash flows into positive cash flow projects are expected to pay-out to investors. Note that this does not always happen
Net Shareholder Payout (TTM) = Net Common Equity Issued (Purchased) (TTM) + Total Dividends Paid (TTM)
Example: If MSFT buys back 10 million dollars of its own stock and pays out 5 million in dividends over the last twelve months, the net shareholder payout would be equivalent to 15 million.