Yield is a percentage. PE is a number. Like I said: how many years to pay off the stock.GrumpyCatFace wrote:PE ratio is not ‘how long it would take to pay off’, bubba. You’re thinking of Yield.
PE multiple is how many times the annual profits the company is being valued at.
If the shareholder were somehow getting 100% of the profits, they could get their investment paid off. That’s not how it works though.Martin Hash wrote:Yield is a percentage. PE is a number. Like I said: how many years to pay off the stock.GrumpyCatFace wrote:PE ratio is not ‘how long it would take to pay off’, bubba. You’re thinking of Yield.
PE multiple is how many times the annual profits the company is being valued at.
Earnings $2/share
Price per share: $50
$50/$2 = 25 years, same as PE.
Share price should theoretically respond to an increase in cash on hand, in some fashion, yes. That’s a large part of Apples value. They aren’t innovating anymore, but they’ve got a few billion in cash, waiting to be dished out.Martin Hash wrote:Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
Forcing companies to pay full dividends is part of the Hash Plan for Most Liberty to Most People. Companies primarily hold cash to cheat taxes and minority stockholders. There's no legitimate reason for a company to retain earnings: that's what banks and investors are for.GrumpyCatFace wrote:Share price should theoretically respond to an increase in cash on hand, in some fashion, yes. That’s a large part of Apples value. They aren’t innovating anymore, but they’ve got a few billion in cash, waiting to be dished out.Martin Hash wrote:Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
I’d like to own stock in any company that ever gave 100% dividends though.
They keep most of it for re-investment/buybacks/debt. If they gave it all back, the business would never grow.Martin Hash wrote:Forcing companies to pay full dividends is part of the Hash Plan for Most Liberty to Most People. Companies primarily hold cash to cheat taxes and minority stockholders. There's no legitimate reason for a company to retain earnings: that's what banks and investors are for.GrumpyCatFace wrote:Share price should theoretically respond to an increase in cash on hand, in some fashion, yes. That’s a large part of Apples value. They aren’t innovating anymore, but they’ve got a few billion in cash, waiting to be dished out.Martin Hash wrote:Just to be clear, if a company does NOT declare dividends equal to the Earnings, the Price Per Share is supposed to go up to reflect the Retained Earnings, so the stockholder IS supposed to be gaining equity, which means the general idea that PE is how many years to pay off your investment is still technically true.
I’d like to own stock in any company that ever gave 100% dividends though.
Like I said, that's what banks and investors are for. The vast majority of businesses are already passthrough; only the tax/shareholder-cheating ones are C corps.GrumpyCatFace wrote:They keep most of it for re-investment/buybacks/debt. If they gave it all back, the business would never grow.
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