UNSUSTAINABLE DIVIDEND PAYOUTS: HOW INTERNAL AUDITORS CAN PROTECT A COMPANY'S LONG-TERM SUCCESS

[...]investors are relying on stock dividends to increase their income stream. According to the S&P Global Market Intelligence, the correlation between the components of its per-share earnings and S&P 500 stock prices, which were 0.90 in June 2015, was down to 0.55 by the end of June 2016.4...

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Bibliographic Details
Published in:Internal Auditing 2016-11, Vol.31 (6), p.27
Main Authors: Bordere, X Jasmine, Grant, C Terry, Vann, Carol E
Format: Article
Language:English
Subjects:
Auditing standards
Boards of directors
Capital expenditures
Cash flow forecasting
Debt management
Debt service
Dividends
Internal auditors
Investments
Long term debt
Net income
Performance management
Stockholders
Success
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Summary:[...]investors are relying on stock dividends to increase their income stream. According to the S&P Global Market Intelligence, the correlation between the components of its per-share earnings and S&P 500 stock prices, which were 0.90 in June 2015, was down to 0.55 by the end of June 2016.4 Traditional thinking suggests that the two should be highly correlated because stock prices and earnings generally move in the same direction.
ISSN:0897-0378