Payout Ratio
InvestingThe percentage of earnings paid out as dividends, indicating how much profit a company returns to shareholders.
Example
Example: Consider an investor building a $100,000 portfolio. Payout Ratio — the percentage of earnings paid out as dividends, indicating how much profit a company — directly affects investment strategy and long-term returns. Getting this concept right can mean tens of thousands of dollars in difference over a 20-year period. Model your portfolio with our investment calculator.