dividend cover ratio

times covered ratio

a measure of the extent to which a firm's earnings cover DIVIDEND payments on SHARES that expresses PROFIT after tax and interest charges as a ratio of total dividend payments. For example, if a firm's profit after tax were £100,000 and its dividend payments were £50,000, then its dividend cover ratio would be 2:1.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

The dividend cover ratio is a measure of how affordable dividends are.

BEWARE COMPANIES WITH A HIGH YIELD AND LOW DIVIDEND COVER

The ten ratios that were used for conducting firm performance analysis included Acid Test Ratio, Financial Expenses as Percent of Sales Ratio, Current Ratio, Debt to Equity Ratio, Return on Assets Ratio, Return on Equity Ratio, Dividend Cover Ratio, Net Profit Margin Ratio, Earnings per Share after Tax Ratio, and Break-Up Value Shares Ratio.

Analysis of firm financial performance models in construction industry

McGarry adds that while dividend cuts are not a massive risk at the moment, he advises investors to stay vigilant, particularly given the decline that we have seen in dividend cover ratios in recent years.

THE DIVIDEND DANGER-ZONE; Despite record payouts, cover is getting worryingly thin, warns

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