How Dividend Picks Work
Understanding our deterministic, explainable opportunity scoring system
Opportunity Scoring Model
Every dividend opportunity is scored using a transparent, rule-based model that evaluates three key dimensions:
Quality Score
0-100 points
Dividend streak, payout safety, financial health, data completeness
Value Score
0-100 points
Yield level, drawdown opportunity, P/E ratio, P/B ratio
Opportunity Rank
0-100 points
Quality × 0.6 + Value × 0.4 + bonuses/penalties
Quality Score Components (Max 100 points)
Dividend Growth Streak (0-50 points)
2 points per year of consecutive growth (capped at 50)
Payout Ratio Safety (-10 to +20 points)
≤55%: +20 | 56-75%: +10 | 76-90%: 0 | >90%: -10
Financial Health (-10 to +15 points)
Liquidity OK: +5 | D/E ≤1: +5 | Current ratio ≥1.5: +5 | High leverage: -10
Dividend Streak (0-10 points)
1 point per year of consecutive payments (capped at 10)
Data Completeness Gate (-20 to +10 points)
Complete data: +10 | Missing critical data: -20
Value Score Components (Max 100 points)
Yield Level (0-30 points)
≥6%: +30 | 4-6%: +20 | 2-4%: +10 | <2%: 0
Drawdown (0-20 points)
≤-20% off 52w high: +20 | -10 to -20%: +10 | >-10%: 0
P/E Ratio (-5 to +10 points)
≤15: +10 | 16-20: +5 | 21-29: 0 | ≥30: -5
P/B Ratio (-5 to +5 points)
≤3: +5 | 4-7: 0 | ≥8: -5
Tier Definitions
Tier 1
Premium Picks
Rank ≥85, Quality ≥80, Complete data, No critical warnings (dividend cut, high payout risk, high leverage)
Tier 2
Quality Candidates
Rank ≥70, Quality ≥65, Complete data, No dividend cut
Tier 3
Watch List
Rank ≥55 (may have minor data gaps or warnings)
Tier 4
Not Recommended
Rank <55 or significant data quality issues
Opportunity Types
Yield Spike (Quality-Checked)
Yield ≥5%, payout ≤80%, no high leverage, 10%+ drawdown, complete data
Safe High Yield
Yield ≥4%, payout ≤75%, no high leverage, complete data
Discounted Dividend Grower
10y+ growth streak OR 5y CAGR ≥5%, yield ≥3%, 10%+ drawdown, complete data
Drawdown + Dividend Stability
15%+ drawdown, no high payout risk, complete data
Neutral
Does not match specific opportunity type criteria
Warning Flags
Data incomplete
Missing critical data (financials, dividends, or price history)
Dividend cut detected
Annual dividend total decreased year-over-year
High payout risk
Payout ratio ≥90% (limited margin for dividend sustainability)
High leverage
Debt-to-equity ratio or liquidity flags indicate high financial risk
Dividend omission risk
Stock has dividend history but no payments in past 12 months
Important Disclaimer
These picks are signals and candidates for research, not financial advice. All scores and rankings are deterministic and based on publicly available data. Past dividend growth does not guarantee future performance. Always conduct your own due diligence before making investment decisions.