The retention ratio indicates the portion of a company's earnings that is reinvested instead of being paid out to shareholders. It reflects whether a business focuses on growth initiatives ...

The CAPE ratio accounts for inflation in its earnings adjustment. However, earnings should always rise more than the inflation rate because companies don't pay out 100% of their earnings, Bianco said.

The retention ratio measures the percentage of a company’s earnings that are reinvested rather than distributed as dividends. Investors use the retention ratio to assess how much profit a ...