Preferred Dividend Coverage Ratio
Calculate the preferred dividend coverage ratio, a solvency ratio that measures a company’s ability to pay dividends owed to preferred shareholders out of its net income.
The formula is as follows:
\[\text{Preferred Dividend Coverage Ratio} = \text{Net Income} / | \text{Preferred Dividends Paid} |\]Also known as: preferred dividend cover.
Preferred Dividend Coverage Ratio in Python
get_preferred_dividend_coverage_ratio is part of the Ratios module of the open-source Finance Toolkit. Install it with:
pip install financetoolkit -U
Then call get_preferred_dividend_coverage_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(["WFC"], api_key="FINANCIAL_MODELING_PREP_KEY")
preferred_dividend_coverage_ratios = toolkit.ratios.get_preferred_dividend_coverage_ratio()
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| WFC | 17.2763 | 11.2664 | 15.7599 | 16.9299 | 19.5543 |
Parameters
get_preferred_dividend_coverage_ratio accepts the following parameters:
- rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
- growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
- lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
- standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
- trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.