Finding stocks with high yields is easy. Finding stocks that will keep paying those dividends year after year is the hard part. That’s exactly why we built the DivRank Safe Score, a 0 – 100 rating system designed to cut through the noise and identify the dividend stocks most likely to keep sending you checks no matter what the market does.
Here’s exactly how it works.
It Starts With One Simple Rule
Before any stock even gets a Safe Score, it has to pass a basic test: the payout ratio must be 75% or below. A payout ratio tells you what percentage of earnings a company is paying out as dividends. If a company is paying out more than 75 cents of every dollar it earns, there isn’t much cushion left if earnings dip. REITs are excluded entirely since they’re required by law to distribute 90% or more of their income and are a different kind of investment that deserves its own analysis.
Everything else is fair game.
The Six Factors Behind the Score
Once a stock clears the initial hurdle, we score it across six factors that together paint a picture of long-term dividend reliability.
Payout Ratio (25 points)
This carries the most weight because it’s the most direct measure of dividend sustainability. A company paying out less than 20% of earnings gets the full 25 points. The closer you get to 75%, the lower the score. Companies with breathing room in their payout ratio can survive earnings hiccups without cutting the dividend.
Years of Consecutive Dividend Increases (20 points)
There’s no better signal of dividend commitment than a long track record. Companies that have raised their dividends for 50 or more consecutive years earn the full 20 points. A 25-year streak earns 16, a 15-year streak earns 12, and so on. History doesn’t guarantee the future, but decades of unbroken increases tell you a lot about a management team’s priorities.
Debt to Equity Ratio (20 points)
High debt is one of the biggest threats to a dividend. When business gets tough, heavily leveraged companies have to service their debt first — dividends come second. We reward companies with low debt loads heavily here. A debt-to-equity ratio below 0.3 earns the full 20 points, while anything above 2.0 scores zero.
Free Cash Flow Margin (15 points)
Earnings can be massaged by accountants. Cash flow is much harder to fake. We look at FCF Margin — Free Cash Flow divided by Revenue — to understand how much real cash a company generates from its business. A company with an FCF Margin above 20% is a cash machine that can easily fund and grow its dividend. Anything negative scores zero, because negative free cash flow and sustainable dividends don’t mix.
5-Year Dividend Growth Rate (10 points)
A company that’s been consistently growing its dividend isn’t just rewarding shareholders today — it’s demonstrating the financial strength to keep doing so. We look at the 5-year dividend growth rate as a consistency signal. Stocks growing dividends at 10% or more annually earn full points.
Revenue Growth (10 points)
Dividends ultimately have to be funded by a growing business. A company with shrinking revenue will eventually face pressure on its dividend no matter how strong its other metrics look today. Consistent revenue growth — even modest growth above 2% — earns meaningful points here.
What the Score Means
A stock scoring above 85 is a genuinely exceptional dividend payer — low payout, minimal debt, strong cash flow, and a long track record of increases. Scores in the 70–84 range are solid, well-run dividend growers that may be missing one factor. Anything below 60 still passes our filters but carries more risk in at least one area.
The top 200 stocks by Safe Score represent the most financially sound dividend growers in our database of nearly 700 stocks — the ones we believe are most likely to keep raising their dividends through whatever the market throws at them next.