Dividend cover - The ratio between a company"s earnings (net profit after tax) and the net dividend paid to shareholders, calculated as earnings per share divided by the dividend per share.So if a company has earnings per share of 8p and it pays out a dividend of 2.1p, the dividend cover is 8 / 2.1 = 3.80Generally speaking, a ratio of 2 or higher is considered safe (in the sense that the company can well afford the dividend), but anything below 1.5 is risky. If the ratio is under 1, the company is using its retained earnings from a previous year to pay this year"s dividend.
Dividend cover : the ratio between a company"s earnings (net profit after tax) and the net dividend paid to shareholders, calculated as earnings per share divided by the dividend per share.so if a company has earnings per share of 8p and it pays out a dividend of 2.1p, the dividend cover is 8 / 2.1 = 3.80generally speaking, a ratio of 2 or higher is considered safe (in the sense that the company can well afford the dividend), but anything below 1.5 is risky. if the ratio is under 1, the company is using its retained earnings from a previous year to pay this year"s dividend.
Dividend cover