Stock Dividend Payout Ratio Calculator

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.