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 Chat Group
  • Help support this page and press the Facebook Like button below. Thanks!

Join Dstockmarket's Facebook Page 

Recent Articles

  1. Stock Market Analysis April 2019

    Apr 22, 19 06:55 AM

    A technical analysis of the US stock market. I go through the major indices of the US market and see where it is likely to go.

    Read More

  2. Technical Analysis Of Hang Seng Index : Market Outlook

    Apr 22, 19 06:47 AM

    Technical analysis of the Hang Seng. Learn how the Hong Kong stock market is doing and where it is likely to go.

    Read More

  3. Technical Analysis Of Maybank

    Apr 22, 19 06:36 AM

    Technical outlook for Malaysia's biggest market cap stock.

    Read More

  4. Technical Analysis Of The Semiconductor Sector

    Apr 22, 19 06:28 AM

    In this article we will have a look at how the important semiconductor sector is performing using technical analysis.

    Read More

  5. Technical Analysis Of Dayang

    Apr 22, 19 06:15 AM

    What's going on in Dayang. Will it continue to go higher or would it go lower? So let's take a look at what the charts are saying.

    Read More