Читать книгу Corporate Actions - A Concise Guide - Francis Groves - Страница 12

A tool for checking how affordable a dividend is by calculating how many times over the company could afford to pay the dividend out of its after-tax profits.

Of course, in the long term every company must be able to afford its dividend and there are no guarantees that a company that has been paying high dividends might not to have to cut the dividend in the face of a drop in profits. Faced with this uncertainty, some investors rely on a company’s dividend history as an indication of management skill and commitment to maintaining or (better still) consistently raising the dividend. ^[15]

Along with high rate deposit accounts, shares with a high dividend yield are a favourite among those (known as “income investors”) who need to derive an income from their investments.