Thank you, Denise The quickest way to determine the sustainability of a company's dividend is to consider it in relation to earnings and/or cash flow.
The dividend payout divided by the earnings number is referred to as the "payout ratio" — below 100% is generally considered sustainable (so long as it's positive).
First, earnings fluctuate and therefore so does the payout ratio (assuming a non-variable dividend payment).
That's because all the numbers are positive in the "adjusted EPS payout ratio" line (2021 and 2022 actual results and 2023 and 2024 estimated results) and each of them is below 100%.
As you stated, our discipline is to not violate our cost basis and we stick to that as much as possible.
Persons:
Jim Cramer, Denise The, it's, Johnson, Larry, Jim, Denise
Organizations:
investingclubmailbag, Ford, Kenvue, Johnson, Nvidia, CNBC
Locations:
FactSet, IOUs, JNJ