What is a stock's dividend sustainability ratio?

@sibyl 

A stock's dividend sustainability ratio is a financial measure that indicates the likelihood of a company being able to maintain its dividend payments to shareholders in the future. It is calculated by dividing the company's earnings per share (EPS) by the dividend per share (DPS).

The dividend sustainability ratio shows the proportion of a company's earnings that are being allocated towards dividend payments. A higher ratio suggests that a larger portion of earnings is available to cover the dividend and indicates a greater likelihood of sustainability. Conversely, a lower ratio may indicate that the company is paying out a larger proportion of its earnings as dividends, increasing the risk of dividend reductions or discontinuation.

Investors use the dividend sustainability ratio to assess the financial health of a company and evaluate the stability of its dividend payments. It provides insights into whether a company's earnings are sufficient to support its dividend policy over the long term.