Dividend Payout Ratio Calculator
The dividend payout ratio shows how much of a company's profit is paid to shareholders as dividends, and how much is kept in the business.
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- Works offline after your first visit
- Saves on this device
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- Updated
How it works
Divide the dividend paid per share by the earnings per share, then multiply by 100. The part of the profit not paid out is shown as the profit kept.
A ratio above 100% means dividends were larger than profit for that period. Ratios differ a lot by industry, so compare a company with others in the same field.
Worked example
A company paying $1.20 a share in dividends, on $4.00 of earnings per share, pays out 30% of its profit and keeps 70%.
Questions
Why use earnings per share instead of cash?
Earnings per share is the usual starting point. Some analysts also check cash flow, because profit can include items that did not bring in cash.
What if the company had a loss?
The ratio stops being meaningful in a loss year. Dividends paid out of past profits can push it past 100% or below zero, so look at several years.
Is a high ratio a warning sign?
It can be. The right level depends on the company and how steady its profits are, so treat the number as one thing to look at.
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