Dividend Payout Ratio Calculator
See how much of a company's profit goes to shareholders as dividends. Enter dividends and earnings per share, or total dividends and net income, to get the payout ratio and the retention ratio.
How to calculate the dividend payout ratio
- Enter dividends per share and earnings per share, or use company totals.
- The calculator divides dividends by earnings to find the payout ratio.
- Read the payout ratio and the retention ratio, which sum to 100 percent.
Examples
0.50 dividend on 2.00 earnings per share
dividends per share 0.50, earnings per share 2.00
Payout ratio 25%, retention ratio 75%
Frequently asked questions
What is the dividend payout ratio?
The dividend payout ratio is the share of a company's earnings paid to shareholders as dividends. It equals dividends divided by earnings, shown as a percent, and reveals how much profit is returned versus kept.
What is the retention ratio?
The retention ratio is the share of earnings the company keeps to reinvest or pay down debt rather than distribute. It is 100 percent minus the payout ratio, so a 25 percent payout means a 75 percent retention.
Can I use per-share figures or totals?
Either works. Use dividends per share over earnings per share, or total dividends over net income. Both ratios give the same payout percentage as long as they cover the same period.
Is a high payout ratio good or bad?
A high payout ratio returns more cash to shareholders but leaves less to reinvest, and a ratio above 100 percent means a company is paying out more than it earns. The right level depends on the company's stage and goals.
Does the payout ratio use net income or free cash flow?
This calculator uses earnings, either earnings per share or net income. Some investors also compare dividends with free cash flow to check whether payouts are funded by actual cash generation.
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