Dividend.Direct
Metrics & Definitions

Free Cash Flow Per Share: Real Dividend Coverage

2 min read
FCF per share

Learn what FCF per share means, why it matters more than earnings for dividend safety, and how to use it.

Free Cash Flow Per Share

Free cash flow (FCF) per share is the cash remaining after operating expenses and capital expenditures, divided by shares outstanding. It represents actual cash available to pay dividends.

Why FCF Matters More Than Earnings

Earnings can be manipulated through accounting, but cash is cash. FCF shows what the company can actually afford to distribute.

FCF vs Dividend

If FCF per share exceeds the dividend per share, the dividend is covered by real cash flow - a strong sign of sustainability.

How Dividend.Direct Uses It

We calculate FCF payout coverage and award Quality Score points when FCF fully covers the dividend.

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