Payout ratio

What share of profit went out as dividends

In detail

The payout ratio is the dividend per share divided by earnings per share, as a percentage. It shows how much of the profit went to shareholders and how much stayed in the company. A low ratio means most of the profit is going back into the business; a high one means generous returns. Above 100% means the company paid out more than it earned that year.

Example

A $60 dividend against EPS of $200 is a payout ratio of 30%. The other 70% stays in the company.

Related terms

Dividend EPS Dividend yield Dividend per share Total payout ratio

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