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Finance GlossaryNon-Cyclical Stocks
Non-Cyclical Stocks
Definition of Non-Cyclical Stocks
Non-Cyclical Stocks are shares of companies whose performance is relatively stable regardless of economic ups and downs. These businesses provide essential goods or services, so demand remains steady even during slow economic periods, making such stocks less volatile than cyclical stocks.
Related Terms
Liquidity Trap
A Liquidity Trap is an economic event where the general public stashes cash in their bank savings account instead of investing in bonds because of the assumption that a rise in interest rates is imminent, even though interest rates are low.
Swap
A swap is a financial agreement between two parties. They exchange cash flows or liabilities, mostly to manage risk. Common examples of swaps include currency swaps or interest rate swaps. For instance, one party may swap a fixed interest payment for a floating one to hedge against changes in interest rates. A swap helps both parties involved manage exposure and optimize financing costs.
Dividend Payout Ratio
The Dividend Payout Ratio refers to dividends paid to shareholders as a percentage of the net income or Earnings Per Share (EPS) of a company. The formula to calculate dividend payout ratio is:
DPR = Dividend / Net income
or
DPR = Dividend / Earnings Per Share
A higher dividend payout ratio means that a company is redistributing a chunk of its profits to shareholders, which generally implies that the company is well-established.
DPR = Dividend / Net income
or
DPR = Dividend / Earnings Per Share
A higher dividend payout ratio means that a company is redistributing a chunk of its profits to shareholders, which generally implies that the company is well-established.
Broker
A broker is an intermediary between a securities exchange and investors. Only registered entities can place trades on a securities exchange. These members can be individuals or firms known as stockbrokers.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
Paid-Up Capital
Paid-Up Capital is the amount of money that the company has received from its shareholders in exchange for the company's stock. It is thus the portion of the authorised capital which has actually been subscribed by the investors and paid for. Paid-up capital of the company appears in the balance sheet.
Market Out Clause
Market Out Clause is a provision in a contract that allows a party, usually an underwriter or buyer, to withdraw from or renegotiate a deal if major market conditions change suddenly. It protects parties from unexpected events like market crashes, extreme volatility, or economic shocks that could significantly affect the value or feasibility of the transaction.
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