Adequate Dividend Cover
: Fitch forecasts average dividend cover
of around 3x and average post-maintenance and post-tax interest cover (PMICR) at around 1.
Centrica also said it may have to operate with historically low dividend cover
"for a period of time" to maintain shareholder payouts.
Working to keep dividend cover
within the expected range of around 1.
The latest research by The Share Centre shows dividend cover
- a ratio of profit after tax divided by dividends paid - is 18 per cent lower than a year ago and half the level of just two years ago.
This reflects an increase in dividend cover
of 5% and 7% respectively.
The ten ratios that were used for conducting firm performance analysis included Acid Test Ratio, Financial Expenses as Percent of Sales Ratio, Current Ratio, Debt to Equity Ratio, Return on Assets Ratio, Return on Equity Ratio, Dividend Cover
Ratio, Net Profit Margin Ratio, Earnings per Share after Tax Ratio, and Break-Up Value Shares Ratio.
This is a function of lower dividend cover
, meaning companies have less income retained for future investment.
The pending $130bn US transaction will reward our shareholders for their long-term support of our strategy and will provide us with a strong balance sheet, improved dividend cover
and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future," Colao said.
When investing for income, investors should take into account factors such as dividend cover
, or the company's earnings per share divided by the share dividend.
The group reckons it can achieve these targets while maintaining a dividend cover
around its established range.
which can be deduced from the relationship between free cash flow and the per-share dividend rate--has developed in disparate ways in the recent past.
easyJet intends to start paying an annual dividend based on a dividend cover
of five times, with the first payout made in 2012 in respect of the year ending 30 September 2011.