NZ Dividend Safety Analysis
NZX stocks with lower payout ratios. A lower payout ratio may indicate better dividend coverage, though it does not guarantee future payments.
Critical Information
No dividend is guaranteed "safe." Even stocks with low payout ratios can reduce, suspend, or eliminate dividends at any time. Payout ratios are one metric among many and should not be used as the sole basis for investment decisions. This information is for educational purposes only and is not financial advice. We are not a Financial Advice Provider (FAP) or Financial Service Provider (FSP). Consult a licensed financial adviser before making investment decisions.
Understanding Payout Ratios
Payout Ratio = Dividends Paid / Net Earnings
- Under 40%: Very conservative - company retains most earnings
- 40-60%: Conservative - balanced approach to dividends and reinvestment
- 60-80%: Moderate - higher proportion paid as dividends
- Over 80%: Aggressive - may have less room to maintain dividends if earnings decline
Note: Some industries (REITs, utilities) traditionally have higher payout ratios by design.
Very Conservative Payout (Under 40%)
Companies paying less than 40% of earnings as dividends. Higher retained earnings.
Conservative Payout (40-60%)
Companies with balanced dividend and reinvestment approach.
Moderate Payout (60-80%)
Companies paying a higher proportion of earnings as dividends.