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.
- 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.