What Is The Dividend Payout Rate?

What is dividend payout rate?

Dividend payout rate, also known as "dividend distribution rate" or "dividend payout rate", is the percentage of dividends paid to shareholders in company profits.

Investors can find out the best companies by examining the dividend payout ratio of different issuing companies.

Generally speaking, companies with higher dividend paying rates are more likely to be preferred companies.

Dividend payment formula

Dividend payout rate formula, also known as cash flow.

(1) dividend payout ratio formula = annual gross dividend / annual net profit + non cash expenditure - non cash sales) * 100%

or

Dividend distribution rate = cash dividend - preferred stock dividends after tax profits preferred stock dividends

The measurement of dividend payout rate with annual time unit is very unreliable.

A better way is to draw a trend line according to the dividend payment rate in several years to observe the dividend payout rate.

(2) dividend payout rate = (dividend per share / net earnings per share) x 100%

The dividend payout rate reflects how much the common shareholders get from the total net income of each share. For a single common stock investor, this index reflects the current interest more directly than the net income per share.