Expedia Uses Just 11% of Its Profits for Dividends. Could a Bigger Payout Be Coming?
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Expedia Group (NASDAQ:EXPE | EXPE Price Prediction) just declared another quarterly dividend of $0.48 per share. That payment uses only a small share of Expedia’s profit. The company’s dividend payout ratio is 10.8%.
Payout Ratio Shows How Much Room the Dividend Has
A payout ratio is the share of a company’s earnings that it pays out as dividends. Revenue and earnings tell you how much profit there is. The payout ratio tells you how much of a hit the dividend could take. At 10.8%, Expedia keeps most of what it earns. Profits could drop sharply before the dividend is at risk, and the company can raise it without stress.
Income seekers will find a modest payout. The yield is only 0.68%. The valuation helps. Expedia trades at a forward P/E of about 11, meaning the share price divided by expected earnings over the next year. That compares with a trailing P/E of about 23, so Wall Street expects profits to keep rising.
Buybacks Get Most of Expedia’s Cash
Most of Expedia’s returned cash goes to buybacks. In 2025, dividends cost $200 million, while Expedia repurchased about 9M shares for $1.7B. In the third quarter of 2026, it bought back about 2 million shares for $576 million, adding year-to-date buybacks to about $1.5 billion. A new $5B authorization arrived on May 7, 2026.
The company is also spending on growth. It closed its CarTrawler acquisition during the third quarter to expand its B2B segment, where revenue rose 23%. Trailing 12-month free cash flow reached $3.7 billion. Leverage remains a concern, with debt-to-equity at 5.19.
A Dividend That Was Once Suspended
Expedia has paid dividends since 2010. The quarterly payment rose from $0.07 to $0.34 by March 2020. Payments then ended until a $0.40 dividend in March 2025. The quarterly payment rose 20% to $0.48 in 2026. The next one goes ex-dividend Nov 18 and is paid Dec 10.
A Travel Slowdown Is the Main Threat
The pause after 2020 shows the main risk. Travel spending falls quickly in a downturn. Expedia lost $2,612,000,000 in 2020. Growth is already slowing: fourth-quarter revenue guidance calls for growth of 4.0% to 5.7%, down from 11.9% in the third quarter. Reuters reported the shares slipped as US-Iran war fallout kept pressure on travel companies. The stock is down 8.92% over the past week and 7.57% year to date.
A good sign would be another increase in February. This year’s higher rate was first declared on 2026-02-12. Warning signs would be shrinking earnings, slower buybacks, or rising debt.
Verdict: Plenty of Room for the Dividend to Grow
Expedia’s 10.8% payout ratio leaves plenty of room for dividend increases, even if earnings fall. The stock offers a small but growing dividend alongside large buybacks. The current yield remains modest for income-focused portfolios.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
