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% (778 of 796) 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™.

796 dividend cuts
since inception in 2015
W.P. Carey (WPC) announced plans to rebase its dividend after deciding to exit all of its office properties (15% of rent). We estimate a dividend cut of around 20% is likely in the fourth quarter, reflecting the lost cash flow.

Although a lower dividend rate has not officially been announced, as straight shooters, we are including this event in our Dividend Safety Score track record to log the rating we had for W.P. Carey before this news arrived.

This was a surprising announcement since W.P. Carey had provided no hints that a divestiture of these properties was desirable or even a consideration. The REIT's offices had delivered stable results as well, with occupancy above 95%, long remaining lease terms, and a diverse mix of mostly investment-grade tenants. 

W.P. Carey's dividend was also reasonably covered with an 80% payout ratio, and the balance sheet had a BBB+ credit rating. Had management chosen to maintain the dividend, we estimate the REIT's payout ratio would have hovered near 90% in 2024, a level it touched several years ago.

Investors will receive shares in an office REIT spin-off to lessen some of the dividend blow. But this (upcoming) cut was a tough one to predict given the amount of discretion involved with management's decisions to divest a chunk of the portfolio and roll with a lower payout ratio.
Brandywine Realty (BDN) cut its dividend by 21%. The office REIT needed to address a payout ratio hovering near 100%, rising debt costs, and challenging conditions to sell properties, which were a key part of its financing plans.
Very Unsafe
Ready Capital (RC) lowered its dividend by 10%, marking its second cut in the last year. The commercial mortgage REIT's payout ratio was projected to remain above 100% after closing its acquisition of Broadmark Realty, which lowered Ready Capital's leverage but increased exposure to the cyclical construction market (15% of total loans).

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

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