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The Black Friday hypefest in the UK has prompted warnings of consumers stretching their finances. They are not alone. Dividend cover at British companies is surprisingly low, too.

On Thomson Reuters I/B/E/S estimates, half the FTSE 100 will pay a dividend covered less than two times by earnings. A July survey by the Share Centre said cover across the FTSE 350 was at its lowest since 2009.

Five companies account for almost two-fifths of UK dividends. One is Vodafone, where forecast earnings of 7 pence a share are way short of the 13 pence forecast payout.

But dividends are paid from cash flow, not earnings. Vodafone’s free cash flow is put at £4.4bn for the year to March 2018. That is ample to cover the £3.2bn total dividend. Even if it were not, borrowing to pay a dividend is do-able for a year or so — as Royal Dutch Shell did last year, for instance. The oil group also reduced its cash outlay by paying in shares. A third of its $15bn dividends were in stock. The resulting dilution was mopped up by buybacks, which can be spread out.

Special dividends are generally used for one-off distributions. But Ryanair pays them instead of regular dividends. It has returned €1.9bn in this way since 2008, arguing that it is a more appropriate mechanism for a cyclical industry. Better still is a payout ratio based on profit or free cash, rather than a progressive policy where dividends rise each year. BHP switched to a payout ratio in 2016.

Many would love to see the back of Black Friday. Plenty of companies should think about ditching progressive dividends, too.

The Lex team is interested in hearing more from readers. Are progressive dividends risky and unaffordable, or do they represent a key commitment to shareholders? Please tell us what you think in the comments section below.

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