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 ?
The dividend coverage ratio was approximately 3.3 times.
We believe these transactions support our ability to achieve our stated financial targets, including reducing our leverage to below 4.0x in 2020, growing our dividend between 10% and 15% annually through 2020, and maintaining dividend coverage of more than 2.0x through 2020." The acquisition will be financed with 21,656,683 Archrock shares to be issued to JDH Capital and $175M in cash, on a net basis.
PNNT's ratings remain supported by its strong long-term track record in credit, experienced management team, sufficient liquidity and strong historical dividend coverage. PNNT's ratings remain constrained by above-average exposure to non-senior debt and equity investments relative to peers, elevated energy exposure and higher-than-peer leverage.
"Notably, our dividend outlook is supported by expected growth in earnings and cash flow and in line with our historically strong dividend coverage ratios."
Accretive year-one adjusted earnings per share and free cash flow; strengthened dividend coverage
"We continue to return value to shareholders through our recent dividend increase while achieving a dividend coverage ratio of nearly 1.4 times for the quarter."<br />Oneok is maintaining 2018 net income guidance of $955 million to $1.15 billion.
Including the dividend of USD 1.44, MIC will have distributed approximately 81.4% of the Adjusted Free Cash Flow generated during 2017 for a dividend coverage ratio of approximately 1.2 times.
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 4.91x, "provides a substantial cushion in case of a significant reduction of cash flows in the future."
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).