Dividend cover


 

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Dividend cover

The ratio between a company's earnings (net profit after tax) and the net dividend paid to shareholders, calculated as earnings per share divided by the dividend per share.So if a company has earnings per share of 8p and it pays out a dividend of 2.1p, the dividend cover is 8 / 2.1 = 3.80Generally speaking, a ratio of 2 or higher is considered safe (in the sense that the company can well afford the dividend), but anything below 1.5 is risky. If the ratio is under 1, the company is using its retained earnings from a previous year to pay this year's dividend.



Similar Matches

Expected dividend yield

Expected dividend yield

Total amount of dividends received during the life of a futures contract or total dividends received for holding a particular stock one year. See: Current yield.


Liquidating dividend

Liquidating dividend

Payment by a firm to its owners from capital rather than from earnings.


Selling dividends

Selling dividends

Inducing a prospective customer to buy shares in order to profit from a dividend scheduled in the near future.


Cumulative dividend feature

Cumulative dividend feature

A requirement that any missed preferred or preference stock dividends be paid in full before any common dividend payment is made.


Dividend Discount Return

Dividend Discount Return

The rate of return which equates the present value of future expected dividends with the current market price of a security.


Further Suggestions

With dividend
dividend growth
Dividend policy
accumulated dividend
Perfect market view (of dividend policy)
income dividend
Dividend distribution
Indicated dividend
Outstanding Dividends
Dividend
Ex stock dividends
dividend reinvestment plan
Stock dividend
passed dividend
Ex dividend
Dividend Discount Model (DDM)
scrip dividend
Dividend clientele
Dividend Order
interim dividend
Dividend clawback
Income dividend
Dividend payout ratio
Year end dividend
Dividend requirement


 
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