Calculator Inputs
This page stays single-column overall, while the form fields shift to three columns on large screens, two on medium screens, and one on mobile.
Example Data Table
| Company | Dividend / Share | EPS | FCF / Share | Net Debt / EBITDA | Interest Coverage | Dividend CAGR | Result Band |
|---|---|---|---|---|---|---|---|
| Alpha Income Ltd. | 2.20 | 4.60 | 5.10 | 1.20x | 9.10x | 7.00% | Very Safe |
| Balanced Yield Corp. | 3.10 | 4.50 | 4.90 | 2.20x | 5.80x | 4.60% | Safe |
| Steady Cash Holdings | 2.70 | 3.30 | 3.40 | 3.30x | 3.60x | 2.20% | Borderline |
| Leveraged Yield Plc. | 3.60 | 2.90 | 2.60 | 4.70x | 1.90x | -1.20% | Risky |
Use the example values as a template for entering your own company fundamentals.
Formula Used
EPS Payout Ratio (%) = (Annual Dividend Per Share ÷ EPS) × 100
FCF Payout Ratio (%) = (Annual Dividend Per Share ÷ Free Cash Flow Per Share) × 100
Net Debt to EBITDA = Net Debt ÷ EBITDA
Interest Coverage = EBIT ÷ Interest Expense
Final Dividend Safety Score = Weighted average of nine normalized factor scores.
| Factor | Weight |
|---|---|
| EPS payout coverage | 18% |
| Free cash flow payout coverage | 18% |
| Debt load | 12% |
| Interest coverage | 12% |
| Dividend growth | 10% |
| EPS growth | 10% |
| Liquidity | 8% |
| Dividend track record | 7% |
| Cash flow stability | 5% |
Lower payout pressure, lower leverage, stronger coverage, and positive growth usually produce a higher safety score.
How to Use This Calculator
- Enter the company name for identification.
- Fill in dividend per share, EPS, and free cash flow per share.
- Provide net debt, EBITDA, EBIT, and interest expense using the same currency units.
- Enter dividend CAGR and EPS growth as percentages.
- Supply current ratio, years paying dividends, and your internal cash flow stability score.
- Press Calculate Safety Score to display the rating above the form.
- Review the factor table and Plotly graph to see strengths and weaknesses.
- Use the CSV or PDF buttons to save the result summary.
Frequently Asked Questions
1. What does the dividend safety score measure?
It estimates how sustainable a dividend appears by combining payout coverage, leverage, interest protection, liquidity, growth, operating stability, and dividend history into one score.
2. Is a high yield always safer?
No. A high yield can result from a falling share price or weak fundamentals. The calculator checks whether earnings, cash flow, and balance-sheet strength actually support the payout.
3. Why are both EPS and free cash flow used?
EPS shows accounting coverage, while free cash flow shows cash-based coverage. Looking at both reduces the chance of relying on only one potentially misleading measure.
4. What payout ratio is usually considered healthy?
Many investors prefer payout ratios under 60% for regular businesses. Utilities, telecoms, and REITs may operate with different ranges, so context still matters.
5. Why does leverage matter for dividend safety?
Heavier debt can redirect cash toward interest and repayments. That leaves less room for dividend protection during slowdowns, recessions, or unexpected earnings weakness.
6. Can I use this for banks or REITs?
You can, but interpret results carefully. Sector-specific metrics such as funds from operations, regulatory capital ratios, or payout conventions may matter more than general ratios.
7. What does the cash flow stability score represent?
It is a custom input for how predictable the company’s operating cash generation appears. Higher stability usually means a better ability to maintain dividends through weaker periods.
8. Should this score be my only investment decision tool?
No. Use it alongside valuation, industry trends, management quality, competitive advantages, payout policy, macro conditions, and your own portfolio objectives.