PayRatio, known as the dividend payout ratio, is the amount of dividends paid to stockholders relative to the amount of total net income of a company. The amount that is not paid out in dividends to stockholders is held by the company for growth. The amount that is kept by the company is called retained earnings Typically, PayRatio of 50% or less is regarded as adequate (which would mean that the company is retaining as much cash as it is paying out). At 100% or more, the company is distributing all of its earnings as dividends or even dipping into reserves from previous years.
Formula:
PayRatio = 100 * DivPaid / NetIncBXor
Evauates to NA if NetIncBXor is negative or DivPaid is 0 or negative
It's calculated as Total Dividends divided by Income Before Extraordinary Items for the period, multiplied by 100 to express the number in percentage points. Total dividends, in this case, includes dividends across all share classes and preferred shares. It does not include the value of non-cash dividends like stock dividends that were paid during the period, but it does otherwise include special dividends.
The 5-year average payout ratio is calculated by taking the payout ratios for each of the last five fiscal years, from the annual data feed, and averaging them.