06-24-2013, 07:10 PM
You're absolutely right, of course. I concede that it is a silly psychological anchoring problem.
I do wish that AFL would up the payout ratio just a bit so as to increase the yield, though. I understand that they needed the cash during the crisis to manage / fix their portfolio, but I would hope that things are more stable and sustainable now and more of earnings could be allocated to dividends. I don't mean that they should up the payout ratio to 50 or 60 percent, but even moving to a (still quite safe) 30 or 35 percent payout ratio (assuming earnings stay healthy) would mean a very solid dividend increase from current levels.
I do wish that AFL would up the payout ratio just a bit so as to increase the yield, though. I understand that they needed the cash during the crisis to manage / fix their portfolio, but I would hope that things are more stable and sustainable now and more of earnings could be allocated to dividends. I don't mean that they should up the payout ratio to 50 or 60 percent, but even moving to a (still quite safe) 30 or 35 percent payout ratio (assuming earnings stay healthy) would mean a very solid dividend increase from current levels.