What is a Dividend Safety Score?

A 0-100 transparency score combining four rules-based signals: payout ratio (30%), free-cash-flow coverage of dividends (30%), consecutive years of dividend growth (25%), and any cut in the trailing 10 years (15%). It is not a buy/sell rating - just a way to read a stock's dividend at a glance.

Why does a dividend cut cap the score at 50?

Past behavior matters. A company that has cut its dividend in the last 10 years has shown that, under stress, the dividend is the lever they pull. We treat that as a binary reset: even if the current payout ratio and FCF coverage look great, the score is capped at 50 to keep the headline honest about historical risk.

Why are REITs treated differently?

REITs distribute most of their cash flow as dividends by design, which makes the textbook free-cash-flow coverage rule penalize them inappropriately. For listed REITs we exclude that component and renormalize the score over the remaining weights, with a chip explaining the substitution.

Dividend Safety Snapshot

Score how reliable a stock's dividend looks. Rules-based, transparent — no AI guesswork.

How It Works — What the safety score actually measures

The Dividend Safety Snapshot combines four publicly observable signals into a single 0–100 number. There is no AI, no opinion, and no proprietary "secret sauce" — the formula is published below the score.

The four signals are: payout ratio (how much of every earnings dollar is paid out as a dividend — lower is safer); free-cash-flow coverage (how many times over the company's free cash flow could pay the dividend bill); growth streak (how many consecutive years management has raised the dividend); and cut history (whether the dividend has ever been reduced in the last decade). The first two are weighted at 30% each because they're the directly measurable cashflow signals; the streak gets 25% because past behavior is the least gameable signal; cut history gets 15% as a small weight, but a single cut caps the headline score at 50 — a binary penalty more honest than a single weight.

Concrete example: a stock with a 75% payout ratio (Stretched, 12 of 30), 1.6× FCF coverage (Solid, 22 of 30), 62 years of growth (Aristocrat, 25 of 25) and no cuts (Clean, 15 of 15) earns 74/100. That's "Solid, but stretched payout ratio caps the upside" — honest about the signal we can see today.

When the live fundamentals data is temporarily unavailable, the page falls back to a Lite mode that scores only the two signals available from dividend history (streak + cut). Lite uses a /40 scale — never /100 — so the partial scale is unmistakable. REITs structurally distribute most of their cash flow as dividends, so the FCF-coverage rule doesn't fit them; we exclude that component and renormalize the score over the remaining weights.

Dividend Safety Snapshot iA 0–100 number combining four rules-based dividend safety signals. Not a buy or sell rating. See Methodology.

Ticker iType a US-listed ticker like KO, JNJ, O. The score auto-computes when the ticker resolves.

Enter a ticker above to see its safety snapshot.

Methodology & full breakdown

Formula

score = round( Σ w_i · s_i / Σ w_i · 100 ), optionally capped at 50 if a dividend cut is detected in the last 10 years.

Component bands & weights

Component	Band	Score	Weight
Payout ratio iThe slice of every dollar of profit a company pays out as dividends. 60% means $0.60 of every dollar earned goes to shareholders; 100% means everything.	≤40% / 40–60% / 60–80% / >80%	30 / 22 / 12 / 3	30
FCF coverage iHow many times over a company's free cash flow could pay its dividend bill. 2× means there's a full extra dividend's worth of cushion.	≥2× / 1.5–2× / 1–1.5× / <1×	30 / 22 / 12 / 3	30
Growth streak iNumber of consecutive years the per-share dividend has gone up. 25+ years earns the Aristocrat label.	≥25 / 10–24 / 5–9 / <5	25 / 18 / 10 / 3	25
Cut history iWhether the company has reduced its dividend in the last 10 years. A single cut caps the safety score at 50; past behavior matters.	None / Any cut	15 / 0 (caps final at 50)	15

Glossary

TTM iTrailing twelve months: the most recent four reported quarters added together.: Trailing twelve months — the four most recent reported quarters.
FCF (Free Cash Flow) iCash left over after a company pays for operations and capital projects. Stronger predictor of dividend safety than reported earnings, which can be massaged.: Cash left over after operations and capital expenditures.
Aristocrat tier iS&P 500 companies with 25+ consecutive years of dividend increases. The tightest reliability cohort in the US market.: 25+ consecutive years of dividend growth.
ADR iAmerican Depositary Receipt: a US-traded version of a foreign stock. We can't reliably score these because earnings and dividends use different currencies.: American Depositary Receipt — calculator unrated due to currency mismatch.

Data sources & limitations

Fundamentals: Yahoo quoteSummary (modules: defaultKeyStatistics, financialData, summaryDetail, cashflowStatementHistory). Refreshed up to every 4 hours.
Dividend history: Yahoo v8 chart (cleaned). Refreshed daily.
What's NOT accounted for: one-off special dividends, spinoffs, tax-policy changes, future earnings guidance, sector-specific cashflow conventions (REITs use FFO/AFFO instead of FCF — treated as N/A here).

Page conforms to YieldChampion §1.5 Retail/Pro Balance Principle.

Not financial advice. For informational and educational purposes only. Numbers come from public market data and may be stale. Always consult a licensed financial advisor before making investment decisions.