Q&A : Fundamental Analysis EPS Cannot Cover Dividend

by Dave
(Pa )

If the EPS of a company cannot cover the annual dividend, how can I determine if the company can cover the dividend from their cash flow? Where do I look on the companies balance sheet or income statement to determine if the company can cover their annual dividend, what amount should they have?

Comments for Q&A : Fundamental Analysis EPS Cannot Cover Dividend

Average Rating starstarstarstarstar

Click here to add your own comments

Jan 22, 2018
Rating
starstarstarstarstar 		Not Sure, But A Company That Can't Cover Dividend Is A Red Flag
by: Stephen

Hi, Dave

Thanks for the fundamental analysis question.

I'm not an expert in the FA arena. So if I tried to answer this question I would be misleading you.

But as far as I know, if a company can't even cover their dividend from their earnings, then it raises a red flag problem.

There could be a number of reasons, slowing business, competition or management problems.

As far as I know, the best companies are the ones that grow their EPS substantially y-o-y, or quarterly. Sometimes they don't even issue dividends. If they do, they will keep the dividend very small.

Hope this helps.

Stephen

Click here to add your own comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Ask Me A Question Regarding Stocks.

  • If you like this article, consider starting the Stock Market Course. It is free and jam packed with great information for newbies.
  • Want to have updates on the financial markets? Join my Telegram Channel. Dstockmarket.com Channel.
  • Help support this page and press the Facebook Like button below. Thanks!

Recent Articles

RSS

  1. Dow Jumps Higher After Trade War Pause, Will Markets Go Even Higher?

    Dec 03, 18 08:16 AM

    With an agreement to pause the trade war, Dow is about to jump 450 points higher, but will this rally sustain and go even higher? Lets take a look at the charts.

    Read More

  2. Bull Run To Year End In US Market? It All Depends On This...

    Nov 29, 18 07:51 AM

    Yesterday we saw a huge big rally 600 ++ points. The question now is this rally sustainable and will we have a beautiful Christmas in the stock market this year. Here are a few things to look out for…

    Read More

  3. Technical Analysis Of KLCI 29 November 2018

    Nov 29, 18 07:35 AM

    This sideways movement in the KLCI is really giving investors and traders a headache. What we are experiencing now is a volatility contraction which is often followed by volatility expansion.

    Read More

  4. Nasdaq Tries To Bottom But Still Faces Selling Pressure Nov 26 2018

    Nov 26, 18 08:52 AM

    As the techs reach an area of long term support, its going to be a choppy ride as the market decides whether support will hold or the downtrend continues...

    Read More

  5. Stock Market Analysis October 30 2018

    Oct 30, 18 06:35 AM

    As we close out the month of October 2018, what is in store for us? Let us take a look at the charts and see what they might be telling us.

    Read More