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 ?
4% of the Adjusted Free Cash Flow generated during 2017 for a dividend coverage ratio of approximately 1.
While the FGL and Front Street sales will meaningfully reduce HRG's leverage and improve its upstream dividend coverage of holding company interest expense, the rating is constrained by the concentrated nature of HRG's remaining investments.
ONEOK continues to expect average annual dividend growth of 9%-11% through 2021 and annual dividend coverage greater than 1.
The company said the transaction is expected to create operational and financial benefits, including a focus on groceries, improved earnings, dividends and dividend coverage, strengthened balance sheet, potential growth and liquidity.
Yet, the ending cash balance, with a dividend coverage of 4.
Further, the transaction will be significantly accretive to Windstreams adjusted free cash flow allowing greater financial flexibility for strategic network investments and debt reduction while increasing dividend coverage.
Fitch expects operating earnings-based interest and preferred dividend coverage to remain at or above 10x, and for ACE's retention ratio (net premium written to gross premium written) to increase over time to be more in line with higher-rated peers.
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 rating is also constrained by the potential impact of volatile prices and reforms in the bank's dividend policies on the downside protection or dividend coverage.
Cash Dividend Coverage Ratio: cash flow from operations / dividends (Figelwicz & Zeller, 1991).
01 states the most important factors in determining the value of preferred stock are its yield and dividend coverage and the payment protection of its liquidation preference.
The improvement of our debt structure provides cash for acquisitions, capital improvements and dividend coverage.