Reinvestment Rate

Calculate the Reinvestment rate, a financial metric that measures the proportion of earnings retained by the company.

The reinvestment rate is a financial metric that helps investors assess the portion of a company’s earnings that is being retained by the company for future growth. It’s a valuable indicator for dividend investors as it indicates the sustainability of dividend payments and the company’s approach to distributing profits.

The formula is as follows:

Also known as: plowback ratio, retention rate.

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Calculate the Reinvestment Rate in Python

The Reinvestment Rate is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_reinvestment_rate as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

toolkit.ratios.get_reinvestment_rate()

Which returns:

Parameters

get_reinvestment_rate accepts the following parameters:

• rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
• growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
• lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
• standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
• trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.

Related Valuation Ratios

The Ratios module page introduces the module, and the sidebar lists all of its functions.