What does the honeydew colored (white) line on a FAST Graph depict? (01/23/2015)
The honeydew colored line on a FAST Graph is a plotting of the dividends. The dividend line is now a light shade of green/yellow (honeydew) replacing the previous pink color of the line. FAST Graphs™ reflects dividends in two different iterations. The first is the light green shaded area stacked on and above the orange line which depicts dividends after they have been paid out of earnings.
The second iteration of the honeydew colored line (it appears white on some monitors) is simply a plotting of each year’s dividend. This line serves two purposes. First of all, it allows the subscriber to determine whether dividends are rising steadily or if there have been previous dividend cuts. For example, when the dividends are stacked on top of the earnings line of a cyclical company, it could create the illusion that dividends were cut because the green shaded area would fall with earnings when, in fact, dividends were not cut. The honeydew line allows that to be quickly determined.
The other function of the honeydew line is that it presents a graphical expression of the company’s payout ratio. The area below this line represents the portion of earnings (the green shaded area) that has been paid out as dividends.