A big yield is only good news if the company can afford it. The payout ratio shows what share of earnings goes out the door as dividends. Around half leaves plenty of room; the higher it climbs, the less room there is for a weak year. Dividend coverage is the same comparison the other way up: how many times over earnings could pay the dividend.
Earnings are an accounting figure, so check free cash flow alongside them — that's the third number. Cash is what pays you, and it's much harder to flatter than profit. A holding's detail shows Payout Ratio next to Cash Flow, which compares the dividends paid with the cash the business brought in. Both only change when the company reports, so read them with their data latency in mind.
62% out, 38% kept: room to spare today, less if earnings dip.
Educational content only. It is not personal financial advice.