Dividend Cover

Dividend Cover is a popular measure of dividend safety. It is calculated as earnings per share divided by the dividend per share. It provides a quick fix on how many times the dividend is ‘covered’ by earnings. This is a trailing twelve month figure.

Stockopedia explains Div Cover

This aims to answer the question, how easy it will it be for a company to continue to pay out the current dividend? It does this by working out the ratio of company profits to the amount of dividends paid. For example, if a company had £2m of profits, and paid out £1m in dividends, then the dividend cover ratio would be 2, as £2m / £1m = 2. This means that for every £1 the company pays out, it has another spare to cover the dividend payment. Dividend Cover of less than 1.5 may indicate a danger of a dividend cut while more than 2 is viewed as healthy. The inverse of dividend cover is the Payout Ratio.

As we define the Dividend from the Cashflow statement, that means that it's a negative cash-flow item so the Dividend Cover is negative and so is the Payout Ratio, so it's important to be aware of this when screening.

This is measured on a TTM basis.

Ranks: High to LowAvailable in screenerAvailable as Table Column

The 5 highest Div Cover Stocks in the Market

TickerNameDiv CoverStockRank™
IST:HLGYO.EHalk Gayrimenkul Yatirim Ortakligi AS1146.5996
NYQ:MGMMGM Resorts International714.4363
TSE:ERFEnerplus677.2995
BOM:512229Veritas (India)656.6161
NSQ:WIREEncore Wire426.0699