GrowthPayout#93
Free Cash Flow Growth 1Y is the metric used to the rate at which the business is expanding.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
Dividends Per Share / Earnings Per Share x 100
Description
The percentage of earnings paid out as dividends. Indicates dividend sustainability and how much profit is retained for reinvestment. Companies with moderate payout ratios can grow dividends and invest in the business simultaneously.
Interpretation
25-60% is the ideal range. Below 25% leaves significant room for increases. Above 75% may be unsustainable unless earnings are very stable (like utilities). A payout ratio above 100% means dividends exceed earnings, which requires borrowing or drawing down reserves.
Related metrics: Revenue Growth 1Y, Revenue CAGR 3Y. (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Free Cash Flow Growth 1Y (FCF Growth 1Y)- Primary source filings used to calculate Free Cash Flow Growth 1Y (FCF Growth 1Y).
FAQ
How is Free Cash Flow Growth 1Y calculated?+
Free Cash Flow Growth 1Y uses the formula: Dividends Per Share / Earnings Per Share x 100. Free cash flow growth above 15% is typical of the top quartile compounders. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using Multi-year SEC filings + Damodaran growth-rate datasets.
What is a good Free Cash Flow Growth 1Y value by sector?+
There is no single 'good' value for Free Cash Flow Growth 1Y — context is sector-driven. Free cash flow growth above 15% is typical of the top quartile compounders. The /screener exposes sector-relative percentiles for Free Cash Flow Growth 1Y on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Free Cash Flow Growth 1Y?+
Peter Lynch, Philip Fisher, Bill Miller cite Free Cash Flow Growth 1Y as a key input to to size durable revenue and free cash flow expansion. The academic anchor is Mauboussin's 'measuring the moat' framework. ValueMarkers weights this within the Growth pillar of the VMCI score (12% of total).
What are the limitations of Free Cash Flow Growth 1Y?+
Free Cash Flow Growth 1Y can mislead in high growth at unsustainable unit economics (cash-burn traps). Pair Free Cash Flow Growth 1Y with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Free Cash Flow Growth 1Y data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Free Cash Flow Growth 1Y data, sector percentiles, and the VMCI composite score that integrates Free Cash Flow Growth 1Y with 119 other indicators across 100,000+ stocks. The free /screener exposes Free Cash Flow Growth 1Y as a filterable column.
Used in these guides
Related Growth Indicators
Revenue Growth 1YSGA/Rev
Revenue Growth 1Y measures the rate at which the business is expanding. Value investors to size durable revenue and free cash flow expansion when Revenue Growth 1Y aligns with the rest of the VMC.
Revenue CAGR 3YR&D/Rev
Revenue CAGR 3Y expresses the rate at which the business is expanding. Value investors to size durable revenue and free cash flow expansion when Revenue CAGR 3Y aligns with the rest of the VMCI 1.
Revenue CAGR 5YOpEx Ratio
Revenue CAGR 5Y expresses the rate at which the business is expanding. Value investors to size durable revenue and free cash flow expansion when Revenue CAGR 5Y aligns with the rest of the VMCI 1.
EPS Growth 1YRev/Employee
EPS Growth 1Y expresses the rate at which the business is expanding. Value investors to size durable revenue and free cash flow expansion when EPS Growth 1Y aligns with the rest of the VMCI 120-i.
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