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A Earnings Cents ( Eps ) And Dividend Per Share Essay

Decent Essays

a) Diluted earnings per share (EPS) and dividend per share (DPS) analysis
Webjet Limited (WEB) in 2014 recorded EPS of 0.24 which at the time represented the best result in the company’s history (Morningstar, 2015). In fact, it was 266% improvement on 2013 result of 0.09. The lower EPS in 2013 was mainly due to a lower Net Profit After Tax (NPAT) of $6.5m (2012: $13.6m) due to impact of incurring a number of one-off costs related to launch and initial trading loss of Lots of Hotels as well as acquisition, transition and trading loss of Zuji business (Webjet Limited 2013, p. 3). However further look at historic EPS suggests that lower 2013 rate was one off with rate remaining stable at 0.14 between 2010 and 2011 and then increasing by 36% to 0.19 in 2012.
WEB total dividend in 2014 reached 13.5 cents (Webjet Limited 2014, p. 1) which resulted in DPS increasing by 4% to 0.135 compared to 0.13 in 2013. Historically, DPS has been growing steadily over the years with 0.105 in 2013 increasing by 5% to 0.11 in 2011 and then raising again by over 18% to reach 0.13 in 2012. The rate hasn’t changed between 2012 and 2013.

b) Dividend payout ratio in 2013 (170 words)

Webjet’s dividend payout ratio in 2013 reached 144% compared to 68% in 2012 and 56% in 2014. This represents a significant increase compared to two corresponding years and is mainly as a result of lower EPS in 2013. The company was able to pay its dividends irrespective of the lower earnings during this year due

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