Dividend Safety Score¶

Assesses how sustainable a company's dividend is using four signals covering cash generation, earnings coverage, balance sheet strength, and track record.

Score: 0–100 Rating: safe (≥70) | adequate (45–69) | risky (20–44) | danger (<20) | non-payer

Companies that have never paid a dividend receive a non-payer rating (score 50) — no penalty, no reward.

Signals¶

Signal	Weight	Logic
FCF payout ratio	35%	Dividends / FCF; <50% is safe, >100% is unsustainable
Earnings payout ratio	25%	Dividends / Net Income; <60% comfortable
Balance sheet strength	25%	Net Debt / EBITDA; low leverage = more cushion for dividend
Dividend growth track	15%	Number of years of consecutive dividend growth

Usage¶

PythonTypeScript

from fin_ratios.utils.dividend_score import (
    dividend_safety_score_from_series,
    dividend_safety_score,
)
from fin_ratios.fetchers.edgar import fetch_edgar

annual_data = fetch_edgar('JNJ', num_years=7)
score = dividend_safety_score_from_series(annual_data)

print(score.score)             # 82
print(score.rating)            # 'safe'
print(score.is_dividend_payer) # True
print(score.table())

# One-liner
score = dividend_safety_score('JNJ', years=7, source='yahoo')

import { dividendSafetyScoreFromSeries } from 'fin-ratios'
import { fetchEdgarFlat } from 'fin-ratios/fetchers/edgar'

const annualData = await fetchEdgarFlat('JNJ')
const score = dividendSafetyScoreFromSeries(annualData)

console.log(score.score)            // 82
console.log(score.rating)           // 'safe'
console.log(score.isDividendPayer)  // true

Minimum Requirements¶

At least 2 years of data
dividends_paid, operating_cash_flow, capex, net_income, total_debt, cash, ebitda (or ebit + depreciation) required

Output Structure¶

@dataclass
class DividendSafetyScore:
    score: int
    rating: str   # safe / adequate / risky / danger / non-payer
    is_dividend_payer: bool
    components: DividendComponents
    evidence: list[str]
    interpretation: str

Non-Payer Handling¶

score = dividend_safety_score('GOOGL', years=5, source='yahoo')
print(score.rating)            # 'non-payer'
print(score.is_dividend_payer) # False
print(score.score)             # 50 (neutral)

References¶

Siegel, J. (2014). Stocks for the Long Run (5th ed.). McGraw-Hill.
Dividend Aristocrats methodology (S&P Global).