Payout ratio
How much of each $1 of profit a company pays out as dividends.
A company earning $4 a share and paying $2 has a 50% payout ratio. Real estate trusts often pay out more than their accounting profit, because they pay from cash flow.
Examples from real companies
- Coca Cola (KO): Yes. Coca Cola paid $2.06 per share in dividends over the last 12 months, and it paid a dividend in every year from 2007 to 2025 in StockSlicer’s data. That’s about 65¢ of each $1 of profit (payout ratio).
- At&T (T): Yes. At&T paid $1.11 per share in dividends over the last 12 months, and it paid a dividend in every year from 2008 to 2025 in StockSlicer’s data. That’s about 60¢ of each $1 of profit (payout ratio).
- Realty Income (O): Yes. Realty Income paid $3.24 per share in dividends over the last 12 months, and it paid a dividend in every year from 2017 to 2025 in StockSlicer’s data. That’s about 237¢ of each $1 of profit (payout ratio).
More investing words
Profit per share (EPS)P/E ratioBook value per shareFree cash flowCapital spending (capex)DividendDividend yieldShare buybackDilutionRevenue (sales)Profit marginDebtMarket capitalization10-K and 10-Q reportsStock split
For education only, not investment advice.