🛡️

Dividend Safety Scorecard

Enter a ticker to get an instant dividend safety analysis across 6 key metrics — payout ratio, debt, growth, earnings stability, coverage, and sector comparison.

Featured Tickers

🛡️

Enter a ticker to get your scorecard

Try KO, JNJ, XOM, or any of the featured tickers above

What Is a Dividend Safety Score?

A dividend cut is one of the most damaging events for income investors — it destroys income and typically triggers a sharp stock price decline. The goal of a dividend safety scorecard is to identify these risks before a cut happens.

This tool evaluates six independent metrics — payout ratio, debt load, dividend growth consistency, earnings stability, coverage ratio, and sector yield comparison — and synthesizes them into an overall cut risk score. No single metric tells the whole story, but together they paint a reliable picture.

The 6 Metrics Explained

💰

Payout Ratio

What percentage of earnings are being paid out as dividends? A 40% payout ratio means the company can cut earnings in half and still pay the dividend. A 90% ratio leaves almost no margin for error. Green: ≤55%, Yellow: 56–75%, Red: >75% (REITs/utilities have higher thresholds).

🏦

Debt-to-Equity

High debt means high interest expense — and in a rising rate environment, that crowds out dividends. Companies that borrow to pay dividends are at serious risk. Green: ≤0.5x, Yellow: 0.5–1.5x, Red: >1.5x.

📈

Dividend Growth Trend

Has the company consistently raised its dividend? Consecutive increases signal management confidence and financial health. We track 5 years of dividend history and calculate the CAGR. Green: 4+ of 4 increases, Yellow: 2–3 of 4, Red: 0–1 of 4.

📊

Earnings Stability

Coefficient of variation (CV) measures earnings volatility relative to average earnings. High CV means income is unpredictable — making dividend sustainability less reliable. Green: CV ≤20%, Yellow: 20–40%, Red: >40%.

🛡️

Coverage Ratio

EPS ÷ DPS. How many times does EPS cover the dividend? A 2x coverage ratio means earnings would need to fall 50% before the dividend is at risk. Green: ≥2.0x, Yellow: 1.2–2.0x, Red: <1.2x. Note: REITs use FFO, not EPS.

🏷️

Sector Yield Comparison

Is the yield elevated vs sector peers? Significantly above-average yields can signal either an attractive opportunity or a market warning signal ("yield trap"). Context matters — we compare to sector averages rather than applying one-size-fits-all thresholds.

Score Legend

Score	Meaning	Action
🟢 Low Risk	Most or all metrics are healthy. Dividend appears well-supported.	Hold with confidence. Still monitor earnings.
🟡 Moderate Risk	Mixed signals. Dividend likely sustainable in normal conditions.	Monitor closely. Review before adding more.
🔴 High Risk	Multiple red flags. Dividend may not be sustainable.	Consider reducing position. Research recent earnings.

Frequently Asked Questions

How often is this data updated?▼

The data in this tool is updated quarterly to reflect the most recent annual financials and dividend history. For the latest declared dividends or recent guidance changes, always verify directly with the company's investor relations page or SEC filings.

Why does Realty Income (O) show low EPS coverage?▼

REITs like Realty Income are required by law to pay out at least 90% of taxable income. They use Funds From Operations (FFO) — not GAAP earnings — as the real measure of dividend coverage. Our tool notes this and flags it accordingly. O's FFO coverage of its dividend is actually healthy.

Does a high yield always mean a risky dividend?▼

Not necessarily. High yields occur for two reasons: (1) the stock price has dropped, potentially elevating yield as a warning signal, or (2) the company is genuinely a high-yielding sector (utilities, REITs, MLPs). Context matters. Use the sector comparison metric alongside payout ratio and coverage to distinguish between the two cases.

Can I rely on this to decide whether to buy a stock?▼

This tool is for educational purposes only. It uses trailing data and simplified thresholds. A green score does not mean the dividend can't be cut — unexpected events, recessions, or sector-specific headwinds can change the picture quickly. Always combine this with your own research.

My ticker isn't in the database. What do I do?▼

We currently cover 28 popular dividend stocks including Dividend Aristocrats and major income plays. We add more stocks regularly. For unlisted tickers, you can research the underlying metrics (payout ratio, D/E, coverage) directly on StockAnalysis.com, Macrotrends, or SEC EDGAR filings.

⚠️ Educational Disclaimer: The Dividend Safety Scorecard is an educational tool providing estimated scores based on publicly available financial data. Scores are not investment advice, do not constitute a recommendation to buy or sell any security, and should not be relied upon as the sole basis for investment decisions. Dividend safety scores are estimates only — actual dividend sustainability depends on future financial performance, management decisions, macroeconomic conditions, and other factors not captured here. Past dividend history does not guarantee future payments. Always consult a qualified financial advisor and conduct independent research before investing. Data is updated periodically and may not reflect the most recent earnings, dividend declarations, or material company changes.