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Dividend Safety Screener — Find Safe, High-Yield Dividend Stocks
Dividend payers ranked by a composite safety score built from payout ratio, free-cash-flow coverage, and balance-sheet strength — with a plain-English Safe / Caution / Risky verdict on every row. Filter for the dividends that are actually covered, not just the biggest yields.
How to Read the Dividend Safety Score
The single biggest risk for an income investor is not a low yield — it is a dividend cut. When a company slashes its payout, the stock almost always falls with it, so the investor loses both the income and the capital. The dividend safety score is built to flag that risk before it happens, by asking three blunt questions: can the company afford its dividend out of earnings, out of cash, and without a balance sheet that could force its hand?
Each question is one test worth +1, 0, or -1. Payout ratio is the share of net income paid out as dividends — under 60% is comfortable, 60-80% is getting tight, and over 80% leaves little margin for a bad year. FCF coverage divides dividends paid by free cash flow — at or below 1.0 the dividend is fully funded by real cash, above 1.5 the company is paying more than it generates, and negative free cash flow with a dividend is a red flag. Debt-to-equity checks leverage — under 1.0 is conservative, over 2.0 means debt service could compete with the dividend for cash. Add them up: 3 is Safe, 1-2 is Caution, 0 or below is Risky.
Use the verdict filter to jump straight to the Safe names, or the sector filter to compare dividends within an industry — utilities and staples carry more debt by nature, so context matters. Then click any ticker to open the full Basis Report stock page and confirm the thesis.
Why Cash Flow Beats the Payout Ratio
The payout ratio is the metric most investors know, but it is built on net income — an accounting figure that includes non-cash charges and can be distorted by one-time items. Dividends, by contrast, are paid in cash. That is why this screener adds a free-cash-flow coverage test: it asks whether, after funding the business and its capital spending, the company actually produced enough cash to cover the dividend. A payout ratio can look healthy while the dividend quietly exceeds the cash coming in — the exact situation that precedes a cut. When the two disagree, trust the cash.
Where the Safety Score Falls Short
No single score is a complete thesis. The safety score looks at the most recent reported financials, so it reacts to a sudden deterioration only after it shows up in the numbers. Leverage norms differ by industry — a regulated utility can safely carry debt that would sink a cyclical manufacturer — so read the debt test in context. And the score says nothing about dividend growth history or management's commitment to the payout. Treat a Safe verdict as strong evidence the dividend is well covered, then confirm with a look at the business itself before acting.
Frequently asked questions
What makes a dividend Safe on this screener?
A Safe verdict requires all three tests to pass: a payout ratio of 60% or less, free-cash-flow coverage of 1.0 or better (the company generates at least as much free cash as it pays in dividends), and a debt-to-equity ratio of 1.0 or less. That combination means the dividend is funded by both earnings and cash and the balance sheet is conservative — the profile least likely to see a cut.
What is a good payout ratio for a dividend stock?
As a rule of thumb, under 60% is comfortable for most companies — it leaves room to keep paying through a weak year and to raise the dividend over time. 60-80% is sustainable for stable, cash-generative businesses like utilities and consumer staples but leaves less cushion. Above 80% is a warning: a small drop in earnings could push the payout above 100%, forcing a cut. This screener scores those bands +1, 0, and -1 respectively.
What does FCF coverage above 1.0 mean?
FCF coverage here is dividends paid divided by free cash flow. A value of 1.0 means the dividend consumes exactly all of the company's free cash flow; below 1.0 means there is cash left over after the dividend; above 1.0 means the company is paying out more than it generates and must fund the gap from cash reserves, debt, or asset sales. A reading above 1.5 — or negative free cash flow while still paying a dividend — is a strong signal the payout is at risk.
How does this screener get its data?
It pulls each company's dividend yield, payout ratio, free cash flow, dividends paid, and debt-to-equity from Yahoo Finance, then computes the three coverage tests and sums them into the safety score. Only genuine dividend payers appear. Data refreshes hourly, though the underlying financials update when a company reports.
Should I just buy the highest-yielding Safe stocks?
Yield and safety together are a much better guide than yield alone, but they are still only a starting point. A high yield with a Safe score is worth investigating, but you should still check the business's competitive position, dividend growth track record, and valuation before buying. The safest use of this screener is to filter out the risky payouts first, then do deeper work on the survivors.
How do I find the full analysis for a stock in the screener?
Click the ticker symbol in the first column to open the Basis Report stock intelligence page for that company. From there you can review dividend history, run a full DCF valuation, check free cash flow and earnings quality, and generate a complete research report. The safety screener is the starting filter; the full report gives you the depth to make a decision.