Dividend Cover Rolling

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 the current ‘rolling’ version which balances the last annual figures with the forecasts for the current year.

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 rolling basis.

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The 5 highest Div Cover Stocks in the Market

Ticker Name Div Cover StockRank
NYQ:COO Cooper Companies 707.69 26
NYQ:AMG Affiliated Managers 388.68 66
NYQ:OMI Owens & Minor 353.68 81
SGX:A34 Amara Holdings 318.35 75
NSQ:WIRE Encore Wire 293.9 99
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