# FFO Payout Ratio

Dividends per share as a percentage of FFO per share.

## Definition

The share of a REIT's funds from operations paid out as dividends. REITs must distribute most of their taxable income, so the payout is high by design.

## Formula

(Dividends Per Share ÷ FFO per Share) × 100

## Why it matters

Payout on EPS would read over 100% for most REITs, because depreciation is not a cash cost. On FFO, a payout well under 100% leaves room to reinvest and to survive a bad year; above 100% the dividend is paid from borrowing or asset sales.

## How Standard Equity uses it

Takes the payout ratio's place for REITs in the main table and the Company Note. The estimate years use FFO per share; the history before them still uses GAAP EPS, since FFO history is not available for every year, so the row changes basis at the first estimate.

## The metric

| Category   | REITs      |
| ---------- | ---------- |
| Unit       | %          |
| Applies to | REITs only |

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