Measuring Dividend Quality With Genuine Parts By Robert Loest About this article: With short-term Treasuries currently yielding zero percent and economic growth likely to remain subpar for years, dividend coverage and safety is becoming increasingly important to investors. It's common for analysts to use earnings to determine dividend coverage. The way management manipulates earnings, though, it might be more prudent to utilize some other measure. In my opinion, free cash flow is a far superior method; it's easy to find the numbers to do the simple arithmetic required, and it's real money, not Wall Street money. Lots of free financial Web sites provide enough data to determine any given stock's free cash flow in their financial statement sections. To calculate it, simply go to the statements of cash flows in the most recent annual report, locate capital spending under investing activities and subtract it from cash from operations. It's that easy. Do not use earnings before interest, taxes, depreciation and... Or, call us at 1-866-321-TSCM (8726) Monday-Friday, 8 a.m.-6 p.m. ET. Outside the U.S. and in Canada, call 1-212-321-5200. More Stories From RealMoney Durable Goods Up Move Down the Tech Food Chain Jobless Claims Still High Bulls' Tenacity Is the Big Question Mark Should You Buy It? Pharmaceutical Product Development Bad News Trumps All Support for Banks Holds, For Now Bummer, Yields Are on the Rise Money on the Line Makes a Big Difference Structured Products: Unsafe at Any Price MORE STORIES FROM REALMONEY

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