Category: Dividend Safety

Dividend safety is the ability of a company to pay a dividend. It is defined by a set of metrics calculated by investors and analysts. If the dividend safety is too low, the result is usually a cut or suspension.

The first and most well-known metric is the dividend payout ratio. It compares the dividend rate to earnings per share.

The second metric is the dividend-to-free cash flow (FCF) ratio. It compares the cash required to pay the dividend to the FCF.

Other considerations include credit rating, net debt, total debt, and leverage ratio.

This section contains articles on companies analyzing their ability to pay dividends in depth.