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Dividend safety score
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Background check for future dividends

Dividend safety score

The Dividend safety score is a metric that helps investors evaluate the safety and sustainability of a company's dividend payments. It is a crucial factor for investors who rely on dividend income.

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Debt/Equity
A lower ratio value indicates a stable financial position, reducing the risk of dividend cuts due to debt obligations.
Debt/EBITDA
A lower ratio value implies the company can generate sufficient earnings to cover debt, making dividend payments more sustainable.
Revenue Growth
Checking 3 year CAGR growth. Consistent revenue growth signals a healthy business, more likely to maintain or increase dividend payments.
Dividend Growth
Steady dividend growth indicates a company's commitment to returning value to shareholders, reducing the likelihood of dividend cuts.
Forward Payout Ratio
A lower forward payout ratio suggests a greater margin of safety for dividend payments, as the company retains more earnings for reinvestment.
Payout Ratio / Free Cash Flow
A lower ratio signifies that a company generates enough free cash flow to cover dividend payments, ensuring the safety of dividends.

Extensive coverage of data

Rating thousands of dividend stocks across sectors, countries and industries.

Stock with score
27,000+
of historical data analysed
3 years
Supported exchanges
24
Key metrics
6

Frequently asked questions

What is the dividend safety score?

The dividend safety score is a metric used on www.dividend.watch to evaluate the reliability and sustainability of a company's dividend payments. It considers factors such as payout ratios, debt levels, earnings growth, and dividend history to provide a numerical score that helps investors gauge the likelihood of a company maintaining or growing its dividend in the future.

How is the dividend safety score calculated?

The dividend safety score is calculated using a proprietary algorithm that considers a number of factors, including payout ratios, debt levels, earnings growth, and dividend history. The algorithm then assigns a score between 0 and 10, with 10 being the safest and 0 being the least safe.

How should I use the dividend safety score in my investment decisions?

The dividend safety score should be used as a supplementary tool in your investment decision-making process. It can help you identify companies with a lower risk of cutting their dividends in the future, but it should not be the sole basis for your investment decisions. Be sure to consider other relevant factors.

How often is the dividend safety score updated?

The dividend safety score is updated regularly to reflect changes in a company's financial position and dividend history. It is typically updated at least once per quarter, following the release of a company's latest earnings report. However, the score may also be adjusted more frequently if there are significant changes in a company's financial metrics or dividend policy.

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