Albemarle's Sky-High Returns Face Uncertain Future Despite Lower Dividend Payouts
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Albemarle's return on equity (ROE) is 34%, indicating it efficiently converts shareholders' investments into profits. Its ROE is well above the industry average of 13%.
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There is a relationship between high ROE and earnings growth - Albemarle has seen 49% net income growth over the past 5 years, well above the industry average.
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Albemarle reinvests profits efficiently for growth rather than distributing dividends, as shown by its 42% payout ratio over the last 3 years.
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Albemarle's future payout ratio is expected to drop to 9.2% over the next 3 years.
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However, Albemarle's future ROE is forecast to decline to 11%, despite the expected lower payout ratio. The reasons for this decline are unclear.