A lesson from Bond and Metcash

Extremes in the 1980s and today's high dividend payout ratios have more similarities than you may think.

Summary: We can learn a lot from the experiences of Alan Bond and Metcash. In the 1980s Bond’s rise and fall was all about unlimited credit from banks and seductive profits from high leverage. After the 1987 share market crash and the introduction of dividend imputation, however, Australians began seeking shares in companies that paid tax and issued dividends from their profits. Now Metcash has paid out too much in dividends rather than reinvest capital into its business – something it sorely needed to do.

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