I find pay ratio a useful measure, but the way P123 handles it can be quite misleading. If you’re looking for dividend-paying stocks with low pay ratios, you’ll get a huge number with negative income, since the pay ratio of stocks with negative income defaults to -0.00. I would think there would be a better way to handle this–perhaps making them N/A or, even better, giving them a default pay ratio of 10,000%. I don’t think dividend-paying stocks with negative income should be treated the same as non-dividend paying stocks when it comes to pay ratio, and the only difference in the data we get when using it in our ranking systems is the sign before the 0.00.
Until we determine the proper course, you should exclude stocks with negative income: [font=courier new]NetIncBXorTTM>0[/font].
Just calculate it yourself for 100% transparency???
You should be able to filter them out with:
Eval(IncBXorForComTTM>0,PayRatioTTM,NA)You can replace NA with 10000, if you’d prefer.
I didn’t find all that many companies that dropped out because of the rule – only 38 in the current week.
I hope a proper fix is still planned.
Walter
What’s causing the issue is not the income, it’s DivPaid. It’s 0 for some stocks that have yield (this is fine since DivPaid is trailing, Yield forward looking). But Tthe logic is strange. It returns NA if DivPaid / Income is < 0. Should probably return NA is <= 0. Better yet check num & den individually.
Thanks
Marco’s change is now in effect, and the factor will now only have a value when both numerator and denominator are positive.