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Dividend Coverage & Payout Calculator

Compare a dividend with earnings and free cash flow per share.
FCF payout ratio
44.44%
EPS payout ratio
40.00%
FCF retained per share
$2.50

Coverage is one input. Balance sheet, cyclicality, capital needs, management policy, and dividend seniority also matter.

Dividend yield alone says little about sustainability. This calculator compares the annual dividend per share with EPS and free cash flow per share, producing two payout ratios and the free cash flow retained after the dividend.

Formula reviewed 2026-08-021 primary sourceMethodology and disclosures →

How this dividend coverage & payout calculator works

The calculator divides the annual dividend by EPS and free cash flow per share. The two denominators reveal whether accounting earnings and cash generation tell the same story.

Formula

Payout ratio = annual dividend per share ÷ earnings or free cash flow per share

A low payout ratio does not guarantee safety, and a temporarily high ratio does not guarantee a cut. Business stability and balance-sheet obligations matter.

Primary specifications

Before you use the result

Assumptions

  • • Dividend, EPS, and FCF per share cover comparable periods.
  • • Per-share figures use a consistent diluted share count.
  • • One-time working-capital and capital-spending effects are reviewed separately.

Quick start

  1. 1. Use the declared annual dividend and normalized per-share figures.
  2. 2. Compare earnings and cash payout ratios across a full cycle.
  3. 3. Review leverage, maturity schedule, capex, and management’s capital-allocation policy.

Frequently asked questions

Which payout ratio is better?

EPS and FCF payout ratios answer different questions. Comparing both can reveal accrual, working-capital, or capital-spending differences.

Can a payout ratio exceed 100%?

Yes. That means the dividend exceeded the selected period’s earnings or free cash flow and may have been funded from cash or borrowing.

Should REIT dividends use EPS?

REIT analysis often emphasizes FFO or AFFO because depreciation can make conventional EPS less representative of property cash generation.

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Go deeper

Investing glossaryUnderstand the conceptsStock researchApply it to real names

Coverage is a ratio. Sustainability is a thesis.

Members get the balance-sheet, competitive, capital-allocation, catalyst, and risk evidence behind the payout.

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