ZALIS GLOSSARY: dividend-payout-ratio
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
The percentage of earnings paid to shareholders in dividends.
Calculated as:
Yearly Dividend per Share/Earnings per Share
or equivalently :
Dividends/Net Income
Notes:
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.