Dividend Safety Scores

Led by our founder, a CPA and former equity analyst, our scores analyze payout ratios, balance sheets, company news, and more to predict a company's dividend risk. Ratings are available to subscribers.

0 - 20
Very Unsafe
High risk of being cut
21 - 40
Heightened risk of being cut
41 - 60
Moderate risk of being cut
61 - 80
Unlikely to be cut
81 - 100
Very Safe
Very unlikely to be cut

Our real-time track record

97% of dividend cuts caught in advance

As straight shooters, we maintain a public track record of how our ratings have performed. Since our scoring system's inception in 2015, investors who stuck with companies that scored above 60 (our Safe threshold) would have avoided 97% (809 of 828) of dividend cuts that've occurred.

The scores below reflect our rating before the cut was announced, demonstrating the predictive value of Dividend Safety Scores™.

828 dividend cuts
since inception in 2015
Very Unsafe
Cracker Barrel (CBRL) slashed its dividend by 81%. The roadside restaurant chain faced margin pressure from rising commodity and labor costs. Coupled with declining traffic from inflation-pinched diners, Cracker Barrel's new CEO desired to invest more in growth initiatives to turn the business around. Shares fell more than 10% on the news.
Compass Minerals (CMP) suspended its dividend. The road salt miner and plant nutrition company faced a slew of challenges including mild winter weather, slumping fertilizer prices, and loss of an important customer contract due to quality concerns with its fire retardants. 

Eliminating the dividend frees up more cash to pay down debt and follows a 2021 dividend cut intended to provide more capital for developing a lithium site, which was abandoned just several years later. Compass Minerals is the epitome of the challenges of investing in turnarounds, especially when high debt and factors outside of their control (e.g. weather) are involved.
Very Unsafe
Great Ajax (AJAX) chopped its dividend by 40%. The mortgage REIT's rising borrowing costs were pressuring its profitability and dividend coverage, leading to the payout reduction and a decision to get a new external manager which granted the firm a term loan.

Industry expertise

Overseen by a CPA and former equity analyst

Dividend Safety Scores™ are not some black-box quant metric. Human input is the bedrock for assigning and monitoring our ratings.

Our founder, Brian Bollinger, is a CPA and former equity analyst at a multibillion-dollar investment firm. Brian has spent thousands of hours researching companies and digging into the weeds of financial statements.

In 2015, Brian developed Dividend Safety Scores™ by going through our coverage universe brick-by-brick, studying each industry and business to cement the metrics that matter most. Most of Brian's time is spent monitoring our coverage for material changes in dividend risk.

Rigorous analysis

Every stone is turned over

Dividend Safety Scores™ predict dividend risk over a full economic cycle by analyzing the most important metrics for dividends, including:

  • Payout ratios
  • Debt levels and coverage metrics
  • Recession performance
  • Dividend longevity
  • Industry cyclicality
  • Free cash flow generation
  • Forward-looking analyst estimates

Our analysts take all of this information into account as well as the latest company news, industry developments, and key business model drivers to assign Dividend Safety Scores™ between 0 and 100.

All of the financial data we rely on is delivered to us daily by Standard & Poor's (S&P), one of the world's leading financial data vendors.

Up-to-date ratings

Quarterly reviews, continuous monitoring

We're notified internally if a company's fundamentals experience a change that could alter its dividend risk profile. We'll then dive in to investigate. We'll review the latest earnings report, skim call transcripts, and scrutinize the firm's business model to determine whether a score change is prudent.

At a minimum, all ratings are reviewed after quarterly earnings. If material news (e.g. a lawsuit) comes out between earnings, we'll initiate a review. Published review dates make it crystal clear how up-to-date a score is.

Time-tested results

Validated during the pandemic

The pandemic threw a curveball as swaths of the economy shut down and the sharpest economic contraction in U.S. history ensued. An astonishing 25% (334 out of 1,313) of companies we rated cut their dividends in 2020.

Once the pandemic hit, we worked quickly to incorporate new information into our ratings. When the dust settled, our Safe and Very Safe buckets had avoided all but 8 (or 97.6%) of the cuts in 2020.

Moreover, our scores demonstrated their long-term predictive value.

Using our pre-pandemic ratings as of January 2020 and ignoring any score changes we made as new information rolled in, 93% of the 334 dividend cuts would have still come from firms that scored below our Safe threshold.

Pre-pandemic ratings

Here's a breakdown of the 334 cuts by score bucket as of January 2020:

2020 Performance
Very Unsafe
Very Safe
# of Stocks in Bucket 187 179 330 320 297 1,313
# of Dividend Cuts 96 91 101 33 13 334
% of Stocks That Cut 51% 51% 31% 10% 4% 25%

For a more thorough analysis, read our full pandemic review.

Time-saving clarity

Interwoven throughout the site

At a glance, you'll be able to identify holdings with heightened dividend risk. Got a new investment idea? Vet the company in seconds by looking up its rating. Need more ideas? Screen our coverage of 1,000 rated companies.

Screenshot of Portfolio tables with Dividend Safety Score column

Email notifications

Alerts keep you in the know

If we issue a change to a score in your portfolio, you'll receive an email notification along with our rationale for the change. No surprises or quantitative mumbo-jumbo. Just clear, concise research crafted by real analysts so you'll never feel in the dark.

Email alert of Dividend Safey Score downgrade on mobile

Thorough explanations

Paired with in-depth research

More than just a number, ratings are often published alongside rigorous research reports. That way, you can make informed decisions. Many customers find as much value in our research as in our ratings.

Screenshot of research article

Tailored insights

Industry nuances baked in

Our ratings recognize meaningful differences between industries. For example, a utility company enjoys more stable earnings than a steelmaker, so a utility can afford to maintain a higher payout ratio. We also utilize industry-specific metrics, such as AFFO for REITs and DCF for MLPs.

Screenshot of Adjusted FFO Payout Ratio for a REIT

Ready to analyze your income's safety?

Check out our Dividend Safety Scores™, tracking tools, research, and more with a 2-week free trial. All you need is an email.