Dividend Payout Ratio
Returns the dividend payout ratio, which measures the percentage of net income paid to shareholders as dividends. This is a key metric for evaluating dividend sustainability.
Calculation
Payout Ratio = Dividends Per Share / Earnings Per ShareInterpretation
| Ratio | Interpretation |
|---|---|
| < 0.30 | Low payout, room to grow dividend |
| 0.30-0.50 | Moderate, healthy range |
| 0.50-0.75 | Higher payout, less cushion |
| > 0.75 | High payout, dividend may be at risk |
| > 1.00 | Paying more than earnings (unsustainable) |
Supported Symbol Formats
| Type | Format | Example |
|---|---|---|
| US Stocks | SYMBOL | AAPL, JNJ, T |
| ETFs | SYMBOL | N/A (usually) |
| REITs | SYMBOL | Special rules apply |
Notes
- REITs have higher payout ratios by design (required to distribute 90% of income)
- Very high ratios (>100%) may indicate using reserves or debt to pay dividends
- Returns as decimal; multiply by 100 for percentage
Syntax
=DividendPayoutRatio(Symbol)Returns
Dividend payout ratio as a decimal (e.g., 0.30 for 30%)
Examples
=DividendPayoutRatio("AAPL")=DividendPayoutRatio("JNJ")=DividendPayoutRatio("T")=DividendPayoutRatio("O")=DividendPayoutRatio(A1)=DividendPayoutRatio("MSFT")*100When to Use
- Evaluating dividend sustainability
- Screening for quality dividend stocks
- Assessing dividend growth potential
- Risk analysis of dividend cuts
When NOT to Use
| Scenario | Use Instead |
|---|---|
| Need dividend yield | DividendYield() |
| Need dividend amount | DividendRate() |
| Need earnings data | EPS() or hf_EPS() |
| Analyzing REITs | Consider AFFO payout ratio |
Common Issues & FAQ
Why is the payout ratio over 100%?
The company is paying more in dividends than it earns. This is unsustainable long-term and may indicate a future dividend cut. However, this can happen temporarily during earnings dips.
Why is the result a small decimal like 0.30?
The ratio is expressed as a decimal. Multiply by 100 to get percentage: =DividendPayoutRatio("AAPL")*100
How do I evaluate REIT payout ratios?
REITs must pay 90% of taxable income as dividends. Use AFFO (Adjusted Funds From Operations) payout ratio for REITs instead of earnings-based ratio.
Related Formulas
More MarketXLS Dividends formulas you can use in the same worksheet:
- Dividend Per Share (TTM)
- Dividend Per Share 5 Year CAGR
- Ex-Dividend Date
- Forward Annual Dividend Yield
- Total Dividends Between Two Dates
- Consecutive Period of Increasing Dividend Payout
- Consecutive Period of Uninterrupted Dividend
- Dividend Date
See DividendPayoutRatio used in a complete workbook: Excel Stock Tracker: Build a Professional Portfolio Dashboard in Your Spreadsheet
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