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Dividend Payout Ratio

Calculate dividend payout ratio for companies.

Dividend Payout Ratio Calculator

Calculate Dividend Payout Ratio

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Results

Payout Ratio
Retention Ratio

Formula & Information

Formulas

Payout Ratio = (Total Dividends ÷ Net Income) × 100
Payout Ratio = (DPS ÷ EPS) × 100
Retention Ratio = 100% - Payout Ratio

Interpretation Guide

High (>80%): May indicate limited growth opportunities or mature company
Moderate (30-60%): Balanced approach to dividends and growth
Low (<30%): Company retains most earnings for growth

Key Concepts

What It Measures

  • • Percentage of earnings paid as dividends
  • • Company's dividend policy sustainability
  • • Management's confidence in future earnings
  • • Balance between returns and reinvestment

Important Notes

  • • Industry context matters significantly
  • • Consistent ratios indicate stable policy
  • • Higher ratios may limit future growth
  • • Consider alongside dividend coverage ratio

Example Calculations

Mature Utility Company

Net Income: $1,000,000

Total Dividends: $600,000

Payout Ratio: 60%

Typical for stable, mature companies with steady cash flows

Growth Technology Company

EPS: $2.50

DPS: $0.25

Payout Ratio: 10%

Low payout to fund growth and expansion

v1.0.0.758733

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v1.0.0.758733