What is Payout and What is Its Importance for the Investor
5 minReading time
Published Oct 15, 2025
Understand why the concept makes a difference when multiplying returns.
In the world of investments, there are fundamental indicators that help investors make smarter decisions. One of them is the payout, which shows what percentage of a company's net profit has been distributed to its shareholders.
In this article, you will understand what payout is, how the calculation works, why it is important for better investing, and where to track this indicator practically.
Start now by tracking the indicators of companies on Kyvoo and invest more consciously.
What is Payout?
In Portuguese, payout means "payment". In the financial market, the term represents the percentage of a company's net profit that is distributed to shareholders, usually in the form of dividends.
In other words, it is the portion of the profit passed on to the investor as compensation. The remainder of the result is generally reinvested in the company itself to sustain its future growth.
An important point: payout should not be confused with dividend yield. See the difference:
Indicator | Objective | Simplified Formula |
Payout | Percentage of net profit distributed to shareholders | Dividends ÷ Net Profit × 100 |
Dividend Yield | Percentage of return relative to the share price | Dividends ÷ Share Price × 100 |
While payout looks at the company, dividend yield shows the investor's perspective.
Understand why the concept makes a difference when multiplying returns.
In the world of investments, there are fundamental indicators that help investors make smarter decisions. One of them is the payout, which shows what percentage of a company's net profit has been distributed to its shareholders.
In this article, you will understand what payout is, how the calculation works, why it is important for better investing, and where to track this indicator practically.
Start now by tracking the indicators of companies on Kyvoo and invest more consciously.
What is Payout?
In Portuguese, payout means "payment". In the financial market, the term represents the percentage of a company's net profit that is distributed to shareholders, usually in the form of dividends.
In other words, it is the portion of the profit passed on to the investor as compensation. The remainder of the result is generally reinvested in the company itself to sustain its future growth.
An important point: payout should not be confused with dividend yield. See the difference:
Indicator | Objective | Simplified Formula |
Payout | Percentage of net profit distributed to shareholders | Dividends ÷ Net Profit × 100 |
Dividend Yield | Percentage of return relative to the share price | Dividends ÷ Share Price × 100 |
While payout looks at the company, dividend yield shows the investor's perspective.
How Payout Works in Practice
Let’s go to a practical example:
Company XXLL had a net profit of R$ 120 million.
Distributed R$ 90 million in dividends to shareholders.
Calculation:
Payout = (90 ÷ 120) × 100 = 75%
This means that the company distributed 75% of the net profit to investors and reinvested the remaining 25%.
Simulate different payout scenarios now using the Kyvoo platform. Click here and try it out.
All companies listed on the Stock Exchange are required to disclose this information in their financial reports, especially in the Income Statement (DRE).
Why Payout is Important for Better Investing
The payout is a thermometer that helps to understand what phase the company is in:
Growth companies → lower payout, as they reinvest a large part of their profits.
Mature and established companies → higher payout since they have less need to reinvest.
Red flags:
Payout above 100%: indicates that the company distributed more than it earned, which could compromise its financial health.
Very low payout: it can be strategic for growth, but it may not be attractive for investors looking for immediate income.
Where to Monitor Company Payouts
You can monitor the payout on various channels, such as:
Financial platforms;
Brokers' home brokers;
Websites specialized in investments.
Conclusion
The payout is an essential indicator for investors who want to evaluate a company's phase and strategy. It shows how much of the net profit is passed on to the shareholder and helps to identify whether a company is more focused on growth or on return distribution.
Monitoring this indicator can make a difference in aligning your investment portfolio with your profile and financial objectives.
Open your demo account at Kyvoo now and start practicing your reading of indicators risk-free.
Already an investor? Access Kyvoo and see in real-time the payout of the main listed companies.
Conclusion
The payout is an essential indicator for investors who want to evaluate a company's phase and strategy. It shows how much of the net profit is passed on to the shareholder and helps to identify whether a company is more focused on growth or on return distribution.
Monitoring this indicator can make a difference in aligning your investment portfolio with your profile and financial objectives.
Open your demo account at Kyvoo now and start practicing your reading of indicators risk-free.
Already an investor? Access Kyvoo and see in real-time the payout of the main listed companies.
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Understand why the concept makes a difference when multiplying returns.
In the world of investments, there are fundamental indicators that help investors make smarter decisions. One of them is the payout, which shows what percentage of a company's net profit has been distributed to its shareholders.
In this article, you will understand what payout is, how the calculation works, why it is important for better investing, and where to track this indicator practically.
Start now by tracking the indicators of companies on Kyvoo and invest more consciously.
What is Payout?
In Portuguese, payout means "payment". In the financial market, the term represents the percentage of a company's net profit that is distributed to shareholders, usually in the form of dividends.
In other words, it is the portion of the profit passed on to the investor as compensation. The remainder of the result is generally reinvested in the company itself to sustain its future growth.
An important point: payout should not be confused with dividend yield. See the difference:
Indicator | Objective | Simplified Formula |
Payout | Percentage of net profit distributed to shareholders | Dividends ÷ Net Profit × 100 |
Dividend Yield | Percentage of return relative to the share price | Dividends ÷ Share Price × 100 |
While payout looks at the company, dividend yield shows the investor's perspective.
How Payout Works in Practice
Let’s go to a practical example:
Company XXLL had a net profit of R$ 120 million.
Distributed R$ 90 million in dividends to shareholders.
Calculation:
Payout = (90 ÷ 120) × 100 = 75%
This means that the company distributed 75% of the net profit to investors and reinvested the remaining 25%.
Simulate different payout scenarios now using the Kyvoo platform. Click here and try it out.
All companies listed on the Stock Exchange are required to disclose this information in their financial reports, especially in the Income Statement (DRE).
Why Payout is Important for Better Investing
The payout is a thermometer that helps to understand what phase the company is in:
Growth companies → lower payout, as they reinvest a large part of their profits.
Mature and established companies → higher payout since they have less need to reinvest.
Red flags:
Payout above 100%: indicates that the company distributed more than it earned, which could compromise its financial health.
Very low payout: it can be strategic for growth, but it may not be attractive for investors looking for immediate income.
Where to Monitor Company Payouts
You can monitor the payout on various channels, such as:
Financial platforms;
Brokers' home brokers;
Websites specialized in investments.
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Conclusion
The payout is an essential indicator for investors who want to evaluate a company's phase and strategy. It shows how much of the net profit is passed on to the shareholder and helps to identify whether a company is more focused on growth or on return distribution.
Monitoring this indicator can make a difference in aligning your investment portfolio with your profile and financial objectives.
Open your demo account at Kyvoo now and start practicing your reading of indicators risk-free.
Already an investor? Access Kyvoo and see in real-time the payout of the main listed companies.