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Investing Daily Printable PDF The payout ratio is a common metric that investors study to try to analyze a company’s dividend outlook. The formula is straight forward: divide the dividend paid by net income. It seems to make a lot of sense. The better a company’s profits cover its dividend obligation, the more likely it should be able to pay out the same dividend, or increase it, in the future. One of the surest ways to build wealth (and protect your portfolio) over the long term is to invest in stocks with demonstrable dividend growth. Earnings Not the Same as Cash ....