Skip to content
MARKETS / GLOSSARY / PAYOUT RATIO

Payout ratio

The payout ratio is the share of profit handed to shareholders as a dividend rather than kept and reinvested.

Definition

How it is computed here

Formuladividends paid ÷ net income
UnitRatio (shown as %)
PeriodOne fiscal year, as reported
SourceExtracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from
Identifierpayout
The inputs

What goes into the formula

Dividends paidCash actually paid out during the year, taken from the cash flow statement. The XBRL records cash leaving as a positive number in the financing section; here it becomes the magnitude of what was handed over.
Net incomeThe year's bottom line. When it is negative the ratio has no reading — a company can pay a dividend in a loss year, but it did not pay it out of that year's profit.

A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.

Worked example

How to calculate payout ratio, step by step

A mature company with heavy depreciation.

Dividends paid$1,200M
Net income$1,000M
Free cash flow$1,900M
  1. Payout ratio = 1,200 ÷ 1,000 = 1.20 = 120%.
  2. The company paid out more than it earned.
  3. But against cash: 1,200 ÷ 1,900 = 63% of free cash flow.

Result: 120% of profit, 63% of free cash flow

Two honest numbers, opposite conclusions. The profit-based ratio looks alarming and the cash-based one looks comfortable, and the difference is entirely depreciation on assets bought long ago.

The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.

Why it matters

What payout ratio is good for

The payout ratio is the fastest read on how much room a dividend has. A low ratio leaves space to raise it and to absorb a bad year; a ratio near or above 100% means the next disappointment has to come out of somewhere other than the year's profit.

The limit

What this number does not tell you

Paying above 100% is not automatically unsustainable — a company with heavy depreciation can generate far more cash than accounting profit, and this site shows both. Read it next to dividend coverage and free cash flow, never alone. The ratio also ignores buybacks entirely, so a company returning most of its profit through repurchases shows a low payout ratio and is not retaining anything. For most of this site the ratio does not exist at all. Of 6,088 companies, 3,602 have never reported a dividend in any year on file, and 1,835 paid one in their most recent year. A further 563 have a dividend history but no entry for that particular year — a different fact from never having paid, and shown differently here. An absent payout ratio usually means there was no dividend, not that the figure went missing.

Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.

In the data

Highest reported payout ratio

From the most recent fiscal year of each company.

On a real company

See it in a published filing

Their sectors

These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.

Related

Read next