Cash Flow & Capital Allocation
Earnings Retention Rate
Measures how much net income remains inside the company after common dividends and buybacks. It is not direct economic reinvestment; it is an earnings-retention and shareholder-distribution metric.
Earnings Retention Rate
earningsRetentionRate · Cash Flow & Capital Allocation
Variants: earningsRetentionChangePct1Y / earningsRetentionChangePct3Y / earningsRetentionChangePct5Y
- Definition
- Measures how much net income remains inside the company after common dividends and buybacks. It is not direct economic reinvestment; it is an earnings-retention and shareholder-distribution metric.
- Calculation
- ((net income - abs(common dividends paid) - abs(buybacks)) / net income) * 100. The 1Y/3Y/5Y changes are percentage differences versus the comparable historical value.
- Uses
- Useful for separating businesses that retain cash from businesses that return capital to shareholders. Read it alongside Reinvestment Rate, ROIC, per-share growth, FCF and dilution: high retention creates value only if retained capital is reinvested at attractive returns.
