Payout ratio: what it is and how to read it

What it is

The share of profit paid out as dividends. Below ~60% there's usually room to spare; above 100% the company pays out more than it earns, which can't last forever.

How to read it

A payout above 100% means the dividend is paid with more money than the company earns, which rarely lasts. For a safe dividend, look at the free cash flow payout and at debt.

Educational information; not a recommendation to buy or sell.