What is dividend payout ratio?

Dividend payout ratio is the percentage of a company's earnings paid to shareholders as dividends. Formula: Payout Ratio = (Annual Dividend Per Share / Earnings Per Share) × 100, or equivalently Total Dividends Paid / Net Income × 100. A 40% payout ratio means the company pays 40% of earnings as dividends and retains 60% for reinvestment.

What is a good dividend payout ratio?

It depends on the sector. Generally, 0-50% is considered safe with room for growth, 50-70% is moderate and typical for mature companies, 70-90% is high and common in regulated sectors like utilities and REITs, and above 90% signals elevated dividend cut risk. REITs are a special case — they must distribute at least 90% of taxable income by law, so payout ratios near 90% are normal and measured against FFO rather than net income.

What is the difference between EPS payout ratio and FCF payout ratio?

EPS payout ratio uses reported net earnings: Dividends / Net Income. FCF payout ratio uses free cash flow: Dividends / (Operating Cash Flow - CapEx). FCF payout is often more reliable because earnings can be affected by non-cash items and accounting choices. If FCF payout is significantly higher than EPS payout, the company generates less cash than earnings suggest — the dividend may be less safe than the EPS ratio implies. If FCF payout is lower, cash generation is stronger than earnings, indicating a safer dividend.

What is the dividend coverage ratio?

Dividend coverage ratio = EPS / Dividend Per Share. It is the inverse of payout ratio. A coverage ratio of 2.0× means the company earns twice its dividend — strong coverage. A coverage ratio below 1.0× means the company is paying out more than it earns, which is unsustainable. Coverage of 1.5× or above is generally considered safe.

What is the retention ratio and why does it matter?

Retention ratio = 1 - Payout Ratio. It represents the percentage of earnings the company keeps for reinvestment into growth, debt reduction, or share buybacks. A high retention ratio (low payout) allows more reinvestment for future earnings growth. A low retention ratio (high payout) prioritizes income to shareholders but limits reinvestment capacity. Growth-oriented companies typically have low payout ratios and high retention ratios.

How do I calculate payout ratio if I only have total figures?

Payout Ratio = Total Dividends Paid / Net Income × 100. Both figures are found in the company's income statement and cash flow statement. Total dividends paid appears as a cash outflow in the financing activities section of the cash flow statement. The Payout Ratio tab supports both per-share input (DPS ÷ EPS) and total figure input (Total Dividends ÷ Net Income).

Is this dividend payout ratio calculator free?

Yes. The Dividend Payout Ratio Calculator Pro on StockToolHub is completely free with no registration, account, or subscription required. All five tabs are fully accessible.

Dividend Payout Ratio Calculator Pro — EPS, FCF, Safety & Trend

Calculation Method

Input Method

Per Share Data

Dividend Per Share (DPS)

Annual dividend per share

Earnings Per Share (EPS)

Diluted EPS (trailing twelve months)

Context optional

Sector

Dividend Payout Ratio

—

Enter dividend and earnings data

Retention Ratio

—

Earnings Retained

—

Dividend Coverage Ratio

—

Safety Assessment

—

Payout Ratio Scale

Safe
0–50%

Moderate
50–70%

High
70–90%

Danger
>90%

—

Earnings Allocation — Dividends vs Retained

Multi-Year Payout Ratio Trend

Year	DPS ($)	EPS ($)	FCF / Share ($) opt	Payout Ratio	FCF Payout opt

Payout Ratio Trend

—

Latest Payout

—

Average Payout

—

Highest

—

Lowest

—

Payout Ratio Over Time

Compare Payout Ratios

Company / Ticker	Annual DPS ($)	EPS ($)	FCF / Share ($) opt	Payout Ratio	FCF Payout	Safety

Safest Payout

—

Companies

—

Avg Payout

—

Lowest Payout

—

Highest Payout

—

EPS vs FCF Payout Ratio Comparison

What each tab calculates

Payout Ratio

Calculate dividend payout ratio from DPS and EPS (per share) or total dividends and net income. Includes a visual gauge, retention ratio, dividend coverage ratio, and sector benchmark comparison.

FCF Payout

Calculate the more reliable free cash flow payout ratio using operating cash flow minus CapEx. Compares FCF payout against EPS payout, shows FCF after dividends, and explains the gap between the two metrics.

Safety Score

Composite dividend safety score from 0–100 based on payout ratio, FCF coverage, dividend growth, streak length, and leverage. Each component is scored and displayed with an overall grade and cut risk assessment.

Trend

Track payout ratio across multiple years. Enter annual DPS, EPS, and optional FCF per share for each year. Calculates both EPS and FCF payout per year, identifies the trend direction, and plots both series on a chart.

Compare

Side-by-side payout ratio comparison for up to 5 companies. Each row calculates EPS payout, FCF payout, and a quick safety label automatically. A grouped bar chart ranks all companies instantly.