Dividend Payout Ratio
Calculator
Results
- Dividend payout ratio (%)
- 44.137931
- Earnings retention ratio (%)
- 55.862068
Investing results
| Dividend payout ratio (%) | 44.137931 |
| Earnings retention ratio (%) | 55.862068 |
formula-map diagram
- Dividend payout ratio (%)
- 44.137931
- Earnings retention ratio (%)
- 55.862068
Investing relationship
Formula
Payout ratio = dividend per share ÷ earnings per share= 44.137931034483
Note
This is not investment advice. It is a simplified model: it applies the displayed standard formula to the figures you entered, ignores taxes, fees, currency effects and credit risk, and assumes cash flows arrive exactly as scheduled. Real markets do not behave that way, and past or projected returns do not guarantee future results. Check the assumptions and consult a licensed adviser before acting on any figure.
More in Investing and markets
See all →Frequently asked questions
How is the dividend payout ratio calculated?+
It's calculated as total dividends paid divided by net income (or dividend per share divided by earnings per share), showing what percentage of a company's profit is being returned to shareholders as dividends versus retained.
What does a payout ratio over 100% mean?+
It means the company paid out more in dividends than it earned in net income during that period, which is unsustainable long-term unless earnings recover, since the difference must come from cash reserves, borrowing, or asset sales.
Is a low payout ratio better than a high one?+
Not inherently — a low payout ratio can mean the company is reinvesting profits for growth (common in younger companies), while a high payout ratio is typical for mature, stable companies with fewer growth opportunities. Context and industry norms matter more than the number alone.
How does payout ratio relate to dividend sustainability?+
A very high payout ratio leaves little margin for earnings volatility, meaning a bad year could force the company to cut its dividend to avoid paying out more than it earns. Investors often watch for a rising payout ratio as an early warning sign of dividend risk.
Can the payout ratio be calculated using cash flow instead of net income?+
Yes, some analysts prefer a free-cash-flow-based payout ratio (dividends divided by free cash flow) since net income can include non-cash items, making the cash-based version a more direct measure of whether the dividend is actually covered by cash generated.