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Dividend
DatesDividend reinvestment plansBenefit to shareholdersConsReliability of dividendsCooperativesTrusts
DatesDividend reinvestment plansBenefit to shareholdersConsReliability of dividendsCooperativesTrusts
Reliability of dividends
There are two metrics which are commonly used to evaluate whether a company can sustain its current dividend payout in the long term.''Dividend cover'' is calculated by dividing the company's earnings per share by the dividend. A dividend cover of less than 1 means the company is paying out more in dividends for the year than it earned.
''Payout ratio'' is calculated by dividing the company's cash flow from operations by the dividend. This ratio is used by analysts of income trusts in Canada.