Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends.

Calculated as:




The payout ratio provides an idea of how well earnings support the dividend payments. More mature companies will typically have a higher payout ratio.

In the UK there is a similar ratio is known as dividend cover, calculated as earnings per share divided by dividend per share.




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Related Terms

Cum Dividend

Declaration Date

Dividend

Earnings per Share

Ex-Date

Ex-Dividend

Holder of Record

Record Date

Retention Ratio

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