dividend coverage

Dividend Coverage

The amount by which a company's earnings exceed its dividends. The higher a company's earnings are relative to its dividends, the better its dividend coverage and the more flexibility the company has. A company with good dividend coverage has the option to raise the dividend if it wishes and likewise may still pay the same dividend with little difficulty if earnings decline. Maintaining adequate dividend coverage is especially important if the company has issued a lot of preferred stock, which carries guaranteed dividends.

dividend coverage

The extent to which a firm's net income supports the company's total dividend payments. For example, a utility earning $5.00 per share and paying a dividend of $4.79 per share has relatively weak dividend coverage. Poor coverage permits a firm's management to enjoy less flexibility to raise dividends or to keep them at the same level in the event that earnings decline. See also preferred dividend coverage.
References in periodicals archive ?
a) Cash flow available for dividends and dividend coverage ratio are non-GAAP measures.
They are further evaluated and ranked according to: dividend yield, three-year dividend growth, three-year earnings-per-share growth, dividend coverage ratio and capitalisation ratio.
The improvement of our debt structure provides cash for acquisitions, capital improvements and dividend coverage.
Given strong capital ratios, management are tolerant to short-term dividend coverage ratios below the targeted 1.
Recommended cash flow ratios that analyze a company's ability to meet these obligations include cash interest coverage, cash debt coverage and cash dividend coverage.
Fitch's affirmation of ACGL's ratings reflects the company's consistently strong run rate profitability, low financial leverage, strong interest and preferred dividend coverage and well managed reserve risk.
Case, Chief Executive Officer of Realty Income, commented, "We are pleased that the continued strength in our operations allows us to increase the amount of the dividend we pay to our shareholders, while still maintaining a comfortable dividend coverage ratio.
GAAP earnings-based interest coverage over 12x and statutory maximum allowable dividend coverage of interest expense over 5x.
Standard & Poor's indicated in their announcement that the rating reflects Brixmor's sizable, geographically diverse and predominantly grocery-anchored community and neighborhood shopping centers; favorable turnover of cycle trough (below market) leases in its portfolio; and moderate leverage profile with adequate fixed charge and total dividend coverage.
Pennant's current ratings and Outlook reflect its low leverage, consistent operating performance, moderate investment concentrations, strong asset quality, solid liquidity and dividend coverage, and experienced management team.
ONEOK has disclosed in this news release anticipated cash flow available for dividends, free cash flow and dividend coverage ratio, which are non-GAAP financial metrics, used to measure the company's financial performance and are defined as follows:
ENH's GAAP operating earnings-based interest and preferred dividend coverage has been strong, averaging 6.