Payout ratio: what it is and how to read it
The payout ratio is the share of profit the company pays out as dividends. The rest is kept to reinvest in the business, pay down debt or buy back shares.
How it is calculated
Payout ratio = dividends paid / net income (or dividend per share / EPS).
How to read it
Between 30% and 60% is usually comfortable: it pays out and still has room to grow. Above 80-100%, the company pays out almost everything or more than it earns, and the dividend may be at risk if profits weaken.
Payout ratio in the MeridIAn ranking
Among the 1,588 companies in the ranking with data, the median Payout ratio is 44.1%: half are below and half above. The lowest 25% are below 25.8% and the highest 25% above 67.4%.
For example: NVIDIA, 3.5%; Apple, 12.0%; Alphabet, 4.3%; Banco Santander, 26.2%.
By sector
| Sector | Median | Companies with data |
|---|---|---|
| Basic Materials | 36.3% | 118 |
| Communication Services | 47.5% | 70 |
| Consumer Cyclical | 41.9% | 148 |
| Consumer Defensive | 60.9% | 107 |
| Energy | 43.7% | 93 |
| Financial Services | 43.4% | 320 |
| Healthcare | 38.8% | 108 |
| Industrials | 40.0% | 320 |
| Real Estate | 96.0% | 85 |
| Technology | 30.1% | 135 |
| Utilities | 62.9% | 84 |
What to watch out for
Utilities, REITs or tobacco companies pay out a lot by rule or by strategy, and a high payout is normal for them. Also compare with free cash flow, which is where the money really comes from.
Related metrics
All metrics in the glossary → · Stocks by sector and country → · Ready-made screeners →
General information for educational purposes, not investment advice. Figures from the latest weekly analysis (Oct 8, 2026) with the latest available price.