Is Yamana Gold's Dividend Safe?

Posted by D4L | Monday, October 31, 2011 | | 0 comments »

As a dividend investor, it pays to follow how much of a company's money goes toward funding its dividend. A nice yield now won't matter much if the company can't keep making those payments going forward. Here, we'll highlight a given company and its closest competitors to see just how safe their dividends are, with a little help from three crucial tools.

With an interest coverage of 29.5, Yamana Gold covers every $1 in interest expenses with almost $30 in operating earnings. Given that its EPS payout ratio and FCF payout ratio are below 50%, you shouldn't have to worry that Yamana Gold will need to cut its dividend anytime soon. Most investors don't keep tabs on their companies. That's a mistake. If you take the time to read past the headlines and crack a filing now and then, you're in a much better position to spot potential trouble early.

Source: Motley Fool

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