How to interpret a 1,372.55% dividend payout ratio (GSK)?
I don't think it makes sense to allow accounting numbers that you are not sure how to interpret as being a sell sign.  If you know why the numbers are weird and you feel that the reason for it bodes ill about the future, and if you think there's a reason this has not been accounted for by the market, then you might think about selling.  The stock's performance will depend on what happens in the future. Financials just document the past, and are subject to all kinds of lumpiness, seasonality, and manipulation. You might benefit from posting a link to where you got your financials.  Whenever one computes something like a dividend payout ratio, one must select a time period over which to measure.  If the company had a rough quarter in terms of earnings but chose not to reduce dividends because they don't expect the future to be rough, that would explain a crazy high dividend ratio.  Or if they were changing their capital structure.  Or one of many other potentially benign things.   Accounting numbers summarize a ton of complex workings of the company and many ratios we look at could be defined in several different ways.  I'm afraid that the answer to your question about how to interpret things is in the details, and we are not looking at the same details you are.
The ultimate reason to own stock is to receive cash or cash equivalents from the underlying security. You can argue that you make money when stock is valued higher by the market, but the valuation should (though clearly not necessarily is) be based on the expected payout of the underlying security. There are only three ways money can be returned to the shareholder: As you can see, if you don't ask for dividends, you are basically asking for one of the top two too occur - which happens in the future at the end of the company's life as an independent entity. If you think about the time value of money, money in the hand now as dividends can be worth more than the ultimate appreciation of liquidation or acquisition value. Add in uncertainty as a factor for ultimate value, and my feeling is that dividends are underpaid in today's markets. "Summary: The corporation pays 33.3% tax on dividends it receives and gets a tax refund at the same rate when it pays dividends out. According to http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/TaxRates/Federal-and-Provincial-Territorial-Tax-Rates-for-Income-Earned-CCPC-2015-Dec-31.pdf the corporate tax rates for 2015 are: According to page 3: The federal and provincial tax rates shown in the tables apply to investment income   earned by a CCPC, other than capital gains and dividends received from Canadian   corporations. The rates that apply to capital gains are one-half of the rates shown in   the tables. Dividends received from Canadian corporations are deductible in computing   regular Part I tax, but may be subject to Part IV tax, calculated at a rate of 33 1/3%. If I understand that correctly, this means that a Corporation in Quebec pays 46.6% on investment income other than capital gains and dividends, 23.3% on capital gains and 33.33% on dividends. I'm marking this answer as community wiki so anyone can correct these numbers if they are incorrect. UPDATE: According to http://www.pwc.com/ca/en/tax/publications/pwc-facts-figures-2014-07-en.pdf page 22 the tax rate on taxable dividends received from certain Canadian corporations is 33 1/3%. Further, this is refunded to the corporation through the ""refundable dividend tax on hand"" (RDTOH) mechanism at a rate of $1 for every $3 of taxable dividends paid. My interpretation is as follows: if the corporation receives $100 of dividends from another company, it pays $33.33 tax. If that corporation then pays out $100 of dividends at a later time, it receives a tax refund of $33.33. Meaning, the original tax gets refunded. Note the first line is for the 2015 tax year while the second link is for the 2014 tax year. The numbers might be a little different but the tax/refund process remains the same." "Future tax increases on dividends are likely. The Wall Street Journal says. ""The millions of Americans who receive dividend income ... need to begin adjusting their investment strategy accordingly."" (ref) ""Last week the Senate Budget Committee   passed a fiscal 2011 budget resolution   that includes an increase in the top   tax rate on dividends to 39.6% from   the current 15%—a 164% increase."" ...   ""You can expect fewer businesses   either to offer or increase dividend   payouts.""" You are incorrect in saying that you have a capital gains of $0. You either have no capital gains activity, because you haven't realized it or you have an unrealized capital gains of -$10k. If you were to sell immediately after receiving the dividend you would end up as a wash investment wise - the 10k of dividend offsetting the 10k capital wash. Though due to different tax treatments of money you may be slightly negative with respect to taxes.  You are taxed when you receive the money. And you realized that 10k in dividends - even if you didn't want too.  In the future if this bothers you. You need to pay attention to the dividend pay out dates for funds. But then just after they payout a dividend and have drain their cash account. The issue is that you unknowingly bought 90k of stock and 10k of cash. This information is laid out in the fund documentation, which you should be reviewing before investing in any new fund. The definition of market cap is exactly shares oustanding * share price, so something is wrong here. It seems that the share price is expressed in pence rather pounds. There's a note at the bottom: Currency in GBp. Note the 'p' rather than 'P'. So the share price of '544' is actually 544p, i.e. £5.44. However it's not really clear just from the annotations which figures are in pence and which are actually in pounds. It seems that the market cap is in pounds but the enterprise value is in pence, given that 4.37 billion is about the right value in pounds whereas 441 billion only really makes sense if expressed in pence. It looks like they actually got the enterprise value wrong by a factor of 100. Perhaps their calculation treated the share price as being denominated in pounds rather than pence. It's been traded publicly for only about a month.  I wouldn't put much credence in a P/E ratio just yet because it hasn't had to report anything like a grown-up publicly traded company yet. There can be the question of what objective do you have for buying the stock. If you want an income stream, then high yield stocks may be a way to get dividends without having additional transactions to sell shares while others may want capital appreciation and are willing to go without dividends to get this. You do realize that both Pfizer and GlaxoSmithKline are companies that the total stock value is over $100 billion yes? Thus, neither is what I'd see as a growth stock as these are giant companies that would require rather large sales to drive earnings growth though it may be interesting to see what kind of growth is expected for these companies. In looking at current dividends, one is paying 3% and the other 5% so I'm not sure either would be what I'd see as high yield. REITs would be more likely to have high dividends given their structure if you want something to research a bit more. Dividends are not paid immediately upon reception from the companies owned by an ETF. In the case of SPY, they have been paid inconsistently but now presumably quarterly.