Capital Allocation

Payout Ratio

Dividends per share as a percentage of EPS.

Definition

The payout ratio shows what fraction of earnings the company returns to shareholders as dividends, versus what it retains for reinvestment.

Formula

(Dividends Per Share ÷ EPS) × 100

Why it matters

A sustainable payout ratio depends on the business model. Mature, low-growth companies can support 60–80%+ payout ratios; high-growth companies typically pay little or nothing. Payout ratios above 100% are unsustainable — the company is paying out more than it earns.

How Standard Equity uses it

Shown in the main financial table alongside DPS and dividend yield.

The metric

CategoryCapital Allocation
Unit%
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