Dividend cover, also commonly known as dividend coverage, is the ratio of company's earnings (net income) over the dividend paid to shareholders, calculated as net profit or loss attributable to ordinary shareholders by total ordinary dividend.[1] So, if a company has net profit after tax of 2400 divided by total ordinary dividend of 1000, then dividend cover is 2.4.[2] The dividend cover formula is the inverse of the dividend payout ratio.[3]
Generally, a dividend cover of 2 or more is considered a safe coverage, as it allows the company to safely pay out dividends and still allow for reinvestment or the possibility of a downturn.[1][3] A low dividend cover can make it impossible to pay the same level of dividends in a bad year's trading or to invest in company growth. A negative dividend cover is both unusual and a clear sign that the company is in trouble.[2] The higher the cover, the more unlikely it is that the dividend will fall the following year.[4]
^ abStevenson, David; Mladjenovic, Paul (2012). Investing in Shares For Dummies. Chichester, England: John Wiley & Sons. ISBN 978-1-119-96641-8.
^ abLaw, Jonathan; Owen, Gary (2010) [1995]. A Dictionary of Accounting. Oxford and New York: Oxford University Press. pp. 155–156. ISBN 978-0-19-956305-0.
^ abHobson, Rodney (2012). The Dividend Investor: a Practical Guide to Building a Share Portfolio Designed to Maximise Income. Petersfield, England: Harriman House Limited. ISBN 978-0-85719-234-9.
^France, Mr Richard (2013). Finance for Purchasing Managers: Understanding the Financial Impact of Buying Decisions. London and New York: Gower Publishing, Ltd. ISBN 978-1-4094-6420-4.
Dividendcover, also commonly known as dividend coverage, is the ratio of company's earnings (net income) over the dividend paid to shareholders, calculated...
The dividend yield or dividend–price ratio of a share is the dividend per share divided by the price per share. It is also a company's total annual dividend...
pays a regular cash dividend gets a "buyer's discount". DividendDividendcoverDividend tax Dividend units Dividend yield Dividend reinvestment plan or...
enterprise Dividend policy of the corporation Future plan regarding modernization and expansion. DividendcoverDividend payout ratio Liquidating dividend Reserve...
A carbon fee and dividend or climate income is a system to reduce greenhouse gas emissions and address climate change. The system imposes a carbon tax...
Dividend stripping is the practice of buying shares a short period before a dividend is declared, called cum-dividend, and then selling them when they...
The social dividend is the return on the natural resources and capital assets owned by society in a socialist economy. The concept notably appears as a...
Shares Payout ratio Dividends/Earnings OR Dividends/EPS Dividendcover (the inverse of Payout Ratio) Earnings per Share/Dividend per Share P/E ratio Market...
finance, a dividend future is an exchange-traded derivative contract that allows investors to take positions on future dividend payments. Dividend futures...
The digital dividend refers to the radio spectrum which is released in the process of digital television transition. When television broadcasters switch...
the form of a price rebate and a dividend. Formally called a "Compensated Price" and a "National (or Consumer) Dividend", a National Credit Office would...
Cap and dividend is a market-based trading system which retains the original capping method of cap and trade, but also includes compensation for energy...
A Division 7A dividend in the Australian tax system is an amount treated by the Australian Tax Office (ATO) as an assessable dividend of a shareholder...
Jones Industrial Average whose dividend is the highest fraction of their price, i.e. stocks with the highest dividend yield. Under other analysis these...
inheritance as being partly a common fund and wanted to supplement the citizen's dividend in a tax on inheritance transfers. Henry George proposed to create a pension...
Market Capitalization is ₹5604 Cr as on end June, 2021, PE Value: 17.94 and Dividend Yield: 3%. The company has its registered office in Hyderabad. It started...
short-seller must eventually return them to the lender (plus interest and dividend, if any), and therefore makes a profit if they spend less buying back the...
(capital gains, dividends, and possibly also profits from the writing of covered options) of a basket of shares of conventional dividend-paying corporations...
December 2020 Cognex announced payment of $2 dividend per share. In the press release explaining this special dividend the chairman, Robert J. Shillman, referred...
is often less than the dividend each year, especially after 10–15 years, so the policy owner can pay off the loan using dividends. If the policy is surrendered...
the Dividend Miles mall and for purchases made with a US Airways credit card. Miles could be redeemed for free flights, upgrades, and more. Dividend Miles...
increase in the market capitalization of the issuer’s company along with dividend payments that are part of the distributed profit among shareholders. Investing...
of management, financial strength and capital structure, dividend record, and current dividend rate. To understand these factors, value investors look...