Nothing helps to build one’s long-term wealth like a portfolio chock-full of quality dividend growth stocks such as dividend aristocrats.
Unfortunately the opposite is also true — nothing can hurt your returns like a company having to cut its dividend.
To assess the safety of a dividend, we scrub a company’s financial statements, looking at core metrics such as its payout ratio, financial leverage, free cash flow generation and profitability trends.
Our financial review is converted into a Dividend Safety Score, which answers the question, “Is the current dividend payment safe?”
Our Dividend Safety Scores flagged a number of major dividend cuts before they were announced, including Kinder Morgan Inc (NYSE:KMI), ConocoPhillips (NYSE:COP), Stonemor Partners L.P. (NYSE:STON) and BHP Billiton Limited (ADR) (NYSE:BHP).
Investors can review the real-time track record of our Dividend Safety Scores, analyze how they are calculated, and learn how to use them for your portfolio here.
We used our Dividend Safety Scores to identify 10 of the safest dividend payers you can own today. Each dividend stock represents a solid core holding to consider for your diversified dividend portfolio. You can learn more about how to build a strong, diversified dividend portfolio here.