Dividend Payout Ratio Calculator
See what share of earnings is paid out as dividends, what is retained, and the growth rate retained earnings could support.
Quick answer
The dividend payout ratio is the share of earnings paid out as dividends: dividends / net income, or DPS / EPS. The retention ratio is 1 minus the payout ratio, and the rest is kept in the business.
Dividend Payout Ratio Calculator
Leave blank to skip sustainable growth.
Dividend Payout Ratio
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Retention Ratio
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Sustainable Growth Rate
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Earnings Retained
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Dividend Cover (×)
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Payout vs. Sustainable Growth
| Payout Ratio | Retention Ratio | Sustainable Growth |
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Assumptions & method
- Payout ratio = dividends ÷ net income, or DPS ÷ EPS. Retention ratio = 1 − payout ratio.
- Sustainable growth = ROE × retention ratio, assuming ROE, leverage and payout policy stay unchanged.
- Dividend cover = net income ÷ dividends (1 ÷ payout ratio). It is shown only when dividends are above zero.
- Net income must be above zero. A payout above 100% gives a negative retention ratio, which means reserves are being drawn down.
- Buybacks, preferred dividends and special dividends are not included unless you add them to the dividend figure.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
How the dividend payout ratio works
The payout ratio splits a company's earnings into two parts: the portion paid to shareholders as dividends and the portion retained for reinvestment. A low payout leaves more money to fund expansion, while a high payout returns more cash today but leaves less to grow with. Multiplying the retention ratio by return on equity gives the sustainable growth rate, the pace at which the business can expand from internal funds alone. Comparing the payout ratio over several years, and against cash flow, helps show whether a dividend is comfortably covered or being stretched.