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Netlink Trust

Questions › Category: Financials Quadrant › Netlink Trust
1 Vote Up Vote Down
EA asked 8 months ago

Hi there,
Netlink Trust’s dividend payout ratio for past few years has been more than 100%. Is this due to how the trust is set up and hence, not a concern? Or does this warrant concern over its ability to sustain future dividend payouts? Thanks!

2 Answers
0 Vote Up Vote Down
Victor Chng answered 8 months ago

Hi EA,

Netlink trust payout its dividend from cash flow. The company’s earnings are unstated, which does not reflect its real earning power. You should take the dividend divided by cash flow.

EA replied 8 months ago

Got it, thanks Victor!

Victor Lee replied 1 month ago

Hi Victor,
From the annual report, how can we tell whether a company (such as Netlink) pays out its dividend from cash flow?
Also, when calculating dividend yield when should we use dividend yield = (dividend paid / cash flow) and when to use (dividend paid / net profit)?
Thank you.

Victor Lee replied 1 month ago

Sorry i meant dividend payout ratio.

Victor Lee replied 1 month ago

Sorry i meant dividend payout ratio.

0 Vote Up Vote Down
Victor Chng answered 1 month ago

Hi Victor,
 
In most cases, you should be using the dividend/net profit. There are companies where cash flow is way higher than their net profit. Hence they are able to payout more. In such cases, using cash flow makes more sense. 

Victor Lee replied 1 week ago

Thank you Victor.

Victor Chng replied 6 days ago

Welcome :)