Stock Dividend Payout Ratio Calculator
Computes the payout ratio of a listed company from annual dividends paid and net income earned in the same period.
—
Payout ratio: how much profit goes to dividends
The payout ratio tells you what fraction of net profit a company hands back to shareholders as dividends: payout = dividends_paid / net_profit × 100. Say a firm pays R$ 200 million in dividends out of R$ 500 million in net profit. That's a 40% payout, which is what you'd expect from a mature company. The other 60% stays inside the business as retained profit and gets reinvested. Some rough benchmarks help here. Mature companies tend to distribute 25–50%. Utilities and infrastructure (electricity, sanitation) frequently pay above 70%. Real estate funds (FIIs) in Brazil are legally required to distribute at least 95% of taxable profit. Growth companies usually sit below 30%, and for years Amazon and Google paid nothing at all so they could plow everything back in. Petrobras is the textbook case of governance risk: its payout has swung dramatically with the government's direction, from below 25% when reinvestment was the priority to above 60% when distribution was maxed out.
Applications and context
This sits at the heart of dividend investing (Luiz Barsi, Décio Bazin) and of the FIRE (Financial Independence, Retire Early) approach, where the whole point is building passive income out of dividends. It also shows up in retirement planning, in screening FIIs, and when you're checking whether a distribution can actually last. A very high payout, say above 90%, often means the company is paying more than it earns and propping up the difference with debt.
FAQ
Is a high payout always good? Not really. Once payout climbs past 80–90%, there's barely anything left to reinvest, and the company may have to borrow just to keep the dividend going. You see this a lot in shrinking industries, and it's worth treating as a warning sign.
Payout vs dividend yield? They answer different questions. Payout is about how much of the profit gets distributed, while yield ties the dividend back to the share price (DY = dividends/price). A company paying out 40% can still post a 10% yield if its stock has fallen far enough.
What is the minimum payout in Brazil? Under law 6.404/76, a Brazilian S/A has to distribute at least 25% of adjusted net profit unless its bylaws say something different. FIIs have to pay out 95% to hold on to their tax exemption.
Related Tools
Option Epsilon (Dividend Sensitivity)
Computes the epsilon of a call option, also called psi: the premium's sensitivity to the asset's continuous dividend yield, that is, dV/dq. The larger the expected dividend, the lower the call's value, because part of the asset's return leaks to whoever holds the stock rather than the option. That's why a call's epsilon is negative and equals −S·T·e^(−qT)·N(d1). It's the Greek that ties pricing to the dividend yield. Enter the spot price, the strike, the interest rate, the term in years and the volatility.
Stock PE Forward PE and PB Ratio Calculator
Computes price to earnings (P/E), forward P/E and price to book (P/B) fundamentals of a stock from current price, EPS and book value per share.
Stock Dividend Yield Calculator
Calculate the annual dividend yield (DY) of a stock by dividing last year dividends by the current share price. Compare the income return of each holding.
Cost of Preferred Stock
Computes the cost of capital of a preferred stock: the fixed annual dividend divided by the stock's market price, as a percentage. Since preferred stock usually pays a constant dividend, it behaves like a perpetuity, and its cost is the yield on that dividend. This figure goes into the WACC calculation as the cost of the preferred-capital slice. Enter the annual dividend and the preferred stock's price.
HP-12C Dividend Yield
Computes Dividend Yield of typical Brazilian stock by HP-12C dividends over share price.
EBITDA Margin Calculator
Computes EBITDA margin percent of a company from annual EBITDA and net revenue, useful for operating performance analysis.
The results provided by this tool are for general informational and educational purposes only and do not constitute professional, financial, medical, legal, tax or accounting advice. Always confirm important decisions with a qualified professional and official sources.