Payout Ratios on 20 Dividend Stocks, Ranked Highest to Lowest
AbbVie paid $6.74 a share over the last twelve months and earned $3.54. That is a payout ratio near 190%, and if you sort a list of dividend stocks by that one number it lands at the top, looking like the most fragile dividend in the market. I doubt it is. The number is telling you to check the earnings, not to sell.
That is the trap and the use of the payout ratio in one example. The ratio is the dividend per share for the last twelve months divided by trailing earnings per share. Yield tells you what you receive. Payout tells you how much of the company’s profit it takes to send that check. I ran it on 20 dividend payers using the figures in my market database, checked on September 18, 2026. Every company is one I have written about or could reasonably sit in an income portfolio.
My view: a payout between roughly 40% and 65% is the healthy middle for a mature company, and the interesting cases are the ones outside it in either direction, because each needs a different explanation before it means anything.
All twenty, ranked
The simple average payout across the 20 is 58%, but AbbVie drags that up; the median is 63%, which is the better summary. Eight of the 20 sit at 70% or above, and six are under 30%. The list is not evenly spread. It bunches at the top with consumer staples, telecom, a utility and health care, and at the bottom with technology, insurance and mining.
| Company | Dividend, last 12 months | Trailing EPS | Payout ratio | Yield |
|---|---|---|---|---|
| AbbVie (ABBV) | $6.74 | $3.54 | 190% | 2.55% |
| Altria (MO) | $4.24 | $4.75 | 89% | 6.10% |
| PepsiCo (PEP) | $5.75 | $7.63 | 75% | 4.43% |
| Mondelez International (MDLZ) | $2.00 | $2.73 | 73% | 3.29% |
| Verizon (VZ) | $2.79 | $3.84 | 73% | 5.81% |
| Southern (SO) | $2.98 | $4.15 | 72% | 3.48% |
| Medtronic (MDT) | $2.85 | $4.06 | 70% | 3.09% |
| CVS Health (CVS) | $2.66 | $3.79 | 70% | 2.99% |
| Home Depot (HD) | $9.26 | $14.29 | 65% | 3.09% |
| Procter & Gamble (PG) | $4.26 | $6.62 | 64% | 2.91% |
| Coca-Cola (KO) | $2.08 | $3.33 | 62% | 2.36% |
| Johnson & Johnson (JNJ) | $5.24 | $8.62 | 61% | 1.94% |
| Exxon Mobil (XOM) | $4.08 | $7.77 | 53% | 2.49% |
| Lowe’s Companies (LOW) | $4.85 | $11.83 | 41% | 2.52% |
| JPMorgan (JPM) | $6.00 | $23.34 | 26% | 1.72% |
| Microsoft (MSFT) | $3.56 | $17.95 | 20% | 0.72% |
| Chubb Ltd (CB) | $3.93 | $28.22 | 14% | 1.15% |
| Newmont (NEM) | $1.02 | $7.93 | 13% | 0.83% |
| Apple (AAPL) | $1.05 | $8.72 | 12% | 0.31% |
| Thermo Fisher Scientific (TMO) | $1.80 | $18.58 | 10% | 0.28% |
Look at the top rows first. Altria pays 89% of earnings and yields 6.10%. PepsiCo pays 75% at a 4.43% yield. Verizon pays 73% at 5.81%. These are the companies people buy for income, and the high payouts are the reason. A large yield on a business with slow growth has to come from somewhere, and the somewhere is a high share of profit. That describes a bargain, nothing more: you get more cash now and less growth later.
Now the bottom. Thermo Fisher pays 10%, Apple 12%, Newmont 13%, Chubb 14%. Their yields sit between 0.28% and 1.15%. Nobody buys these for the check. The payout is low because the company either reinvests heavily or buys back stock, and the dividend is a small courtesy to holders.
How I read the ratio
I sort payouts into four bands, and I read each differently.
Above 65%, there is little slack. A stumble in earnings means a freeze or a cut, and management knows it. Utilities get more room here than most, since their earnings are set by regulators and move slowly. Southern at 72% is a different risk from Medtronic at 70%, which sells devices into hospital budgets. If you want the Medtronic story in detail, I looked at it in Medtronic’s price against its own history.
Between 40% and 65% is the normal range for a mature company. The dividend can grow with earnings and there is still cash left over. Home Depot at 65%, Procter & Gamble at 64% and Coca-Cola at 62% all sit at the top edge of it. Lowe’s at 41% and Exxon Mobil at 53% are nearer the middle.
Below 40% is room to raise the dividend, buy back stock or absorb a bad year. It also means the yield is small, which is the trade. JPMorgan at 26% and Microsoft at 20% fit here. I wrote about what Microsoft’s price asks in Microsoft at 27.5 times earnings, and the dividend is a footnote to that case.
Zero is its own band. O’Reilly and Monster Beverage pay no dividend at all. They put the money into growth and buybacks. I left them out of the table because a payout ratio of nothing over something is not informative.
Where the ratio misleads
Trailing EPS is reported earnings. A one-time loss makes a payout look enormous, and a one-time gain makes it look tiny. So before trusting a high or low figure, I always ask whether the earnings were distorted.
AbbVie is the obvious candidate. A payout of 190% would normally signal a dividend about to be cut, but the trailing EPS of $3.54 is small next to the $6.74 it pays, and I suspect one-time items are involved. Its trailing P/E of 74.6 in my database is another sign that the earnings line is depressed. I have not traced what pulled it down, and I will not guess. The right move is to check the filings, and then compare against a forward or adjusted figure, before deciding whether 190% is a warning.
CVS is a second case. At 70% it sits in the high band, but a trailing figure can carry an unusual quarter for four consecutive reports, and then drop out abruptly. The CVS filings on EDGAR show quarterly EPS, which lets you see whether one quarter is doing the damage. I would rather look at that than at the headline ratio.
The reverse happens too. A gain from a business sale pushes EPS up for a year, and the payout looks comfortably low until the gain rolls off. Mining stocks like Newmont face swings from metal prices. At 13% the payout looks thin, but a gold company’s earnings can double or halve in a year, so a low ratio may be a snapshot from a good period and not a stable feature.
The second limit is that earnings are not cash. Payout on earnings ignores the capital a company must spend to stay in business. A utility can show a 72% payout and still fund the dividend partly with new debt, because construction spending outruns operating cash. For those companies I would compare the dividend to free cash flow as well. The SEC’s EDGAR company search gives you the cash flow statement for any name on this list, and it takes about two minutes.
What yield and payout say together
I find the pair more useful than either alone. A high yield with a high payout, like Altria’s 6.10% and 89%, is the least forgiving combination. Any profit drop hits the dividend directly. A high yield with a moderate payout is rarer and better, and a low yield with a low payout is a growth stock that happens to pay something.
The middle of the table shows how much room a dividend has to grow. Take Home Depot: $9.26 on EPS of $14.29. To raise the dividend 10% a year while keeping the payout steady, earnings have to grow 10% too. Take JPMorgan: $6.00 on $23.34. The dividend could grow much faster than earnings for years before the payout hit 65%. That is arithmetic and no forecast, and it shows why a 1.72% yield can beat a 3% yield over a decade if the payout gap is big enough. I made the same argument in more depth when comparing dividend growth with high yield.
I would add one more test. A payout that has crept upward for three years while EPS is flat tells you the board is paying out of habit. A payout that has stayed level while both the dividend and EPS rise tells you management is being disciplined. The table above is a single snapshot and cannot show that, so the trend is the next thing I would pull for any name that interests you.
The sector pattern behind the ranking
Sort the table by industry and the ranking almost explains itself. Staples and telecom (PepsiCo, Mondelez, Altria, Verizon) cluster between 73% and 89%, because their profits grow slowly and owners have long been paid out of them. Health care splits: CVS and Medtronic sit at 70%, Johnson & Johnson at 61%, and Thermo Fisher at 10%. Same sector label, very different capital plans. That is why I never compare payouts across an industry blindly.
Technology and financials sit low for opposite reasons. Microsoft and Apple can afford much larger dividends and choose buybacks and reinvestment instead. JPMorgan and Chubb hold capital because regulators and rating agencies expect them to, so the dividend is one claim on earnings among several. A low payout at a bank is a fact about capital rules more than about generosity.
Energy is the middle case. Exxon at 53% is the sort of payout you would expect from a business with volatile earnings that also wants to keep the dividend steady through a cycle. If oil prices drop, trailing EPS falls and the payout rises. A cut may not follow, yet the ratio will look worse before anything has changed in the business.
How I would use this list
I would not buy from the top of the table for the yield, and I would not buy from the bottom for the growth. I would start from the middle band, then check the two things that break it: whether the trailing EPS is clean, and whether free cash flow covers the dividend. Only after both do I look at the multiple.
For a worked example, my piece on best dividend stocks for durable income goes through the same screen at more length, and I would still rank payout coverage above headline yield when choosing among names.
If AbbVie’s next four quarters of EPS bring the payout below about 100% without a dividend cut, I will treat the current 190% as a distortion. If Altria’s payout climbs above 95% while EPS falls, I would treat its 6.10% yield as a price for risk. Those are the two thresholds I will check on the next round of results.
Analysis and opinion only, not investment advice. Figures come from company filings and market data compiled in my own database and were checked on September 18, 2026; the filings themselves are on SEC EDGAR, and every ratio here is approximate.
Sources: Dividends (SEC Investor.gov glossary) (https://www.investor.gov/introduction-investing/investing-basics/glossary/dividend) · Dividends tax topic (IRS) (https://www.irs.gov/taxtopics/tc404)