Free tool · Live ticker data · No signup
Dividend Safety Score Calculator
Enter any stock ticker to check dividend safety in seconds. Get a SAFE / AT RISK / UNSAFE verdict computed from payout ratio, FCF coverage, debt load, and yield distress signals — the same metrics paid services use, for free.
How the dividend safety score is computed
The score combines four objective metrics: earnings payout ratio (dividend ÷ EPS), FCF payout ratio (total dividends paid ÷ free cash flow), Debt/EBITDA leverage, and a yield distress signal that fires when the current yield exceeds 150% of its five-year average — a classic sign the market is pricing in a cut. If three or more metrics are unsafe, the verdict is UNSAFE. One or two unsafe is AT RISK. Zero unsafe is SAFE. For a deeper fundamental analysis, run the DCF Calculator.
Payout ratio vs FCF coverage — which matters more?
Earnings can be managed through accounting; free cash flow is much harder to fake. A company with a 90% earnings payout but 40% FCF payout is funding its dividend from real cash — which is healthy. The reverse (low earnings payout, negative FCF) is a red flag. Check both. Use the Dividend Yield Calculator to size the income, and the DRIP Calculator to model compounding if the dividend holds.
Frequently asked questions
What is a dividend safety score?
A dividend safety score measures how likely a company is to maintain its dividend. This calculator scores four metrics — earnings payout ratio, FCF payout ratio, Debt/EBITDA leverage, and yield vs. five-year average — to produce a SAFE, AT RISK, or UNSAFE verdict. It is the same logic used by paid services like Simply Safe Dividends, without the subscription.
What payout ratio is safe for dividends?
As a rule of thumb, an earnings payout ratio below 60% is SAFE, 60–80% is AT RISK, and above 80% (or with negative EPS) is UNSAFE. But earnings can be managed — always cross-check with the FCF payout ratio. A company paying out 90% of earnings but only 40% of free cash flow is in much better shape than its earnings payout implies.
Why is FCF payout ratio important?
Free cash flow (FCF) is the actual cash the business generates after capital expenditures. Unlike earnings, FCF is harder to manipulate through accounting. A dividend funded by real cash flow — even a high earnings payout ratio — is more sustainable than one funded by debt or asset sales. Look for FCF payout below 50% for a comfortable margin of safety.
What does the yield distress signal mean?
When a stock's current dividend yield is more than 150% of its five-year average yield, the market is often pricing in a dividend cut. Investors demand a higher yield to compensate for elevated risk, which mechanically raises the yield when the stock price falls. This is a warning sign, not a guarantee — but it warrants extra scrutiny of the other metrics.