Thoughts on Calculating Dividend Payout Ratio
Published May 30, 2011 on Seeking Alpha

We’ve been questioned regarding all of the dividend data that we use to analyze different stocks when we try to find the top choices (see our Top US Dividend Stocks and Top Canadian Dividend Stocks), especially about the payout ratio. It seems simple enough, but one reader was (rightfully) confused about seeing different numbers between two websites and was wondering which one was right and what could cause these differences. It seemed like the answer might be of interest to quite a few readers so we decided to publish it here. What is a payout ratio? The payout ratio is simply the portion of a company’s earnings that it chooses to pay out as dividends. Here's what it would look like as an equation: Payout ratio = dividends / earnings Or Payout ratio = dividend per share / earnings per share How could anyone get It wrong? Not that simple... Read more