What is a good dividend payout ratio?

It depends on the industry. Mature utilities and REITs commonly pay 60–90%. Growth-stage tech companies often pay 0–25% or nothing. A ratio above 100% means dividends exceed earnings, which is typically unsustainable long-term.

What is the retention ratio?

The retention ratio (also called the plowback ratio) is 1 minus the payout ratio. It represents the share of net income kept inside the business to fund growth, debt repayment, or reserves.

Can I use dividends per share instead of totals?

Yes. Payout Ratio = DPS / EPS gives the same result as Total Dividends / Net Income. The per-share method is useful when you only have per-share data from financial statements.

What if net income is negative?

A negative net income makes the payout ratio meaningless or misleading. In that scenario, companies are paying dividends from reserves or debt, which is a red flag for sustainability.

How does payout ratio differ from dividend yield?

Dividend yield compares dividends to the stock's market price (DPS / share price). Payout ratio compares dividends to earnings (DPS / EPS). Both measure dividend generosity but from different reference points.

Dividend Payout Ratio Calculator

Name: Dividend Payout Ratio Calculator
Availability: InStock
Author: Nham Vu

Enter dividends paid and net income to instantly calculate the dividend payout ratio and earnings retention rate.

Input Values

Total Dividends Paid ($)

Net Income ($)

Formulas

Payout Ratio = Dividends ÷ Net Income

Retention Ratio = 1 − Payout Ratio

Per-share: DPS ÷ EPS = same result

Results

Enter values on the left to see results.

Quick Comparison (optional)

Company A

Company B

Summary

Enter dividends paid and net income to instantly calculate the dividend payout ratio and earnings retention rate.

How it works

Enter total dividends paid and net income, or switch to per-share mode and enter dividends per share (DPS) and earnings per share (EPS).
The calculator divides dividends by net income (or DPS by EPS) to produce the payout ratio as a percentage.
The retention ratio is automatically derived as 100% minus the payout ratio.
Results update instantly as you type — no submit button needed.
Use the scenario section to compare two companies or time periods side by side.

Use cases

Evaluate whether a dividend stock aligns with your income or growth investment goals.
Compare payout ratios across competitors in the same industry.
Assess how sustainable a company's dividend is relative to its earnings.
Track changes in a company's payout policy year over year.
Analyze a firm's capital reinvestment rate using the retention ratio.
Screen stocks for dividend growth potential.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu