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 or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_preferred_dividend_coverage_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["PNC", "USB", "COF"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_preferred_dividend_coverage_ratio()
Or, after setting up the Finance Toolkit MCP, ask:
How many times did the net income of PNC, U.S. Bancorp and Capital One cover their preferred dividends from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| COF | 43.6679 | 30.8947 | 20.0965 | 19.4956 | 8.6548 |
| PNC | 23.2146 | 18.9635 | 12.2926 | 15.6136 | 21.3506 |
| USB | 24.6916 | 18.398 | 14.8123 | 16.5983 | 21.5389 |
Parameters
get_preferred_dividend_coverage_ratio accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |