Dividend Payout Ratio

What Does Dividend Payout Ratio Mean?
The percentage of earnings paid to shareholders in dividends.

Calculated as:

Investopedia explains Dividend Payout Ratio
The payout ratio provides an idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio.

In the U.K. there is a similar ratio, which is known as dividend cover. It is calculated as earnings per share divided by dividends per share.

Related Terms

Cum Dividend
Declaration Date
Dividend
Earnings per Share
Ex-Date
Ex-Dividend
Holder of Record
Record Date
Retention Ratio
More Related Terms

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How do I find dividend-paying stocks?
What would happen to a company's external fund requirements if it reduces the payout ratio, or if it suffers a decline in its profit margin?

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