ValuentumAd

Official PayPal Seal

The Dividend Cushion Ratio Warned of Risk to V.F. Corp’s Dividend

publication date: Feb 13, 2023
View a Printer Friendly version of this page, allowing you to print the page. Send a summary of this page to someone via email.

Image: The Dividend Cushion ratio is one of the most powerful financial tools an income or dividend growth investor can use in conjunction with qualitative dividend analysis. The ratio is one-of-a-kind in that it is both free-cash-flow based and forward looking. Since its creation in 2012, the Dividend Cushion ratio has forewarned readers of approximately 50 dividend cuts. We estimate its efficacy at ~90%.

V.F. Corp cut its quarterly dividend by more than 40% on February 7, to a quarterly rate of $0.30 per share from $0.51 per share previously. The cut is yet further evidence of the importance of paying attention to the cash-based sources of intrinsic value--net cash on the balance sheet and future expected free cash flow--when it comes to evaluating dividend health. Please be sure to pay attention to the Dividend Cushion ratios of firms that you follow. Even if you are not a dividend growth or income investor, the Dividend Cushion ratio provides an assessment of the cash-based sources of intrinsic value relative to future potential outlays in the form of the dividend.


Subscribe Now to Gain Access!

This page is available to subscribers only. To gain access to members only content (including this research piece), click here to subscribe. With a subscription, you'll have access to all of our premium commentary, equity reports, dividend reports and Best Ideas Newsletter and Dividend Growth Newsletter, as well as receive discounts on all of our modeling tools and products. Financial advisers and institutional investors have even more to choose from!

Click to Learn More about Valuentum

If you are already a subscriber, please login.

If you believe you should be able to view this area then please contact us and we will try to rectify this issue as soon as possible.


To gain access to the members only content, click here to subscribe. You will be given immediate access to premium content on the site.