DividendsIQ Scores
DScoreDividendsIQ
Our Dividend Quality score, 0 to 100. It measures how consistent, stable and growing a dividend has been over the past several years: the timing and size of payments, the yield, and how sustainable the payout is. A high DScore means a dependable, well-covered, growing dividend; a low one flags erratic or at-risk payers.
TScoreDividendsIQ
Our Technical score, 0 to 100. It rates the stock's long-term price trend and momentum versus the market (for example multi-year price CAGR and trend quality). Higher means stronger, steadier price performance.
RScoreDividendsIQ
Our Risk score, 1 to 5, from the company's financial health (leverage, coverage, payout sustainability). Lower is better: 1 to 2 is low risk, higher numbers are riskier.
Dividend metrics
DPS (Dividend per Share)
The cash dividend paid per share in a single payment period.
Yield
The total dividend paid per share over a year, adding up every payment.
Yield = sum of DPS expected this yearYield %
The annual dividend as a percentage of the current share price. The headline "how much income do I get" number.
Yield % = (Yield / Price) x 100Yield % on Cost
Your personal yield, based on what you actually paid for the shares rather than today's price. If a stock keeps raising its dividend, your yield on cost climbs over time.
Yield on Cost % = (Yield / Buy Price) x 100Regular vs Trailing yield
The regular (forward) yield is the latest regular payment times the number of payments a year, divided by the price. Extras are not part of it: when a stock paid extras (specials or supplementals) in the last 12 months, they show on their own line next to the yield, e.g. "plus $1.20 in extras over the last 12 months". The trailing yield adds up all the cash paid in the last 12 months, extras included. When a payer's amounts are erratic we fall back to the trailing figure and flag it (see Variable and Seasonal).
Payout Ratio
The share of a company's earnings (EPS) paid out as dividends. Low leaves room to grow and absorb a bad year; very high (near or above 100%) can signal a stretched dividend. It is one input into the single Dividend Coverage reading below, which picks the right basis for each kind of asset.
Payout Ratio % = (Dividend / EPS) x 100Dividend Coverage
One number that answers "did it earn what it pays?" for every kind of asset, on a simple scale where 1.0x is break-even. Behind the scenes it uses the right measure for each type, then shows one comparable read:
- 1.2x or higher = Covered (earns comfortably more than it pays)
- 1.0 to 1.2x = Thin (only just covered)
- Below 1x = Not covered (paying out more than it earns / from capital)
An info button on the metric explains the exact basis for the asset you are viewing. A few cases read N/A when it genuinely cannot be measured from public data (for example leveraged bond and muni closed-end funds, which need the fund's reported UNII, brand-new funds without enough history, or a company whose filings don't report the figures we need). The info button always says why.
Stock: Earnings / Dividend | BDC: Net Investment Income / Distribution | REIT: Cash Flow (FFO) / Dividend | Mortgage REIT: book value change vs dividends | REIT preferred: company earnings / all its preferred dividends | MLP: Cash Flow / Distribution | Income fund: NAV change vs distributions | Plain index/bond fund: pass-through (covered)Dividend Growth (CAGR)
Compound Annual Growth Rate: the average yearly rate the dividend grew over a period (we show 3-year and 5-year). We also track a recency-weighted Dividend Trend that leans on the most recent years, so a one-off past spike does not distort the picture.
CAGR = (End / Start)^(1 / years) - 1Chowder
A quick dividend-growth screen popular with income investors: current yield plus the 5-year dividend growth rate. A higher number points to a better mix of income now and growth ahead.
Chowder = Yield % + 5Y dividend CAGRYears Paid
The number of consecutive years the company has paid a dividend. A long streak signals commitment; a break resets it.
Total return
Your real result from a holding: price change plus dividends (reinvested), not the yield alone. A stock can pay a fat dividend and still lose you money if the price sinks faster, so total return is the number that actually matters. It is why DividendsIQ pairs the dividend view (DScore) with a price-trend view (TScore).
Payout behavior
Variable payout
A payer whose individual payments jump around so much that there is no dependable forward rate (for example many option-income ETFs). We show the trailing 12-month yield for these and mark them, because annualizing one payment would mislead.
Seasonal payout
A payer whose payments swing within the year (small in some quarters, large in others) but whose annual total is steady or growing, common for international dividend ETFs. We treat these as dependable and show the trailing 12-month yield, rather than flagging them as erratic.
Return of Capital (ROC)
Part of a distribution that is your own money handed back, not new profit. It is not taxed the year you receive it; instead it lowers your cost basis, so you settle up later when you sell. Harmless when the fund's value per share (NAV) holds up; a warning when the NAV keeps sliding, which means the payout is eroding your capital. See our tax guide for the full picture.
Capital erosion ("melting ice cube")
When a fund pays a fat yield it does not actually earn, funding the checks by selling its own assets. The tell: a high yield plus a falling NAV plus weak coverage. You feel rich collecting the income while the pot that generates it shrinks. DividendsIQ flags this and marks the score down.
Ex-dividend date
The cutoff day for a given payment: you must own the stock before this date to receive that dividend. On the ex-date the price typically opens lower by about the dividend amount, since that cash is leaving the company. Buying just to grab a dividend gains you nothing on paper.
DRIP (Dividend Reinvestment Plan)
An option that automatically uses each dividend to buy more shares of the same stock instead of paying you cash. Those extra shares then pay their own dividends, so the income compounds. Investors typically run a DRIP while building wealth, then switch it off to take the (now larger) dividends as income in retirement.
Special dividend and other extras
A payment on top of the regular dividend: a one-off special when a company has spare cash, or a supplemental that some BDCs pay most quarters. Extras are not part of the regular yield, which would otherwise overstate the repeatable income. In the DScore, each year counts all the cash it paid, extras included; only a clearly unusual year (over 10% above the years on both sides, with extra money) is counted at a normal level.
Pays extras that vary
A label for stocks whose big extras come and go from year to year (for example some insurers). Their yearly totals swing with the extras, not with the business, so the DScore judges them on regular payments only, and a year with smaller extras is not a cut.
No recent payment
A tag on the yield when there has been no regular payment for 12 months (a few weeks more for once-a-year payers). There is no dependable forward rate, so the yield shown is the trailing 12-month figure, and the DScore treats the dividend as stopped.
Year-end profit payout
Many mutual funds, and some ETFs and closed-end funds, pay out the trading profits they made during the year, usually in November or December. Our data provider lists it as a dividend, so the 12-month yield can look huge (a growth fund showing 75%) and swings a lot from year to year. When such a payout is what drives a fund's yield, the yield is tagged "includes year-end profit payout" and the tooltip shows what the fund usually paid in the years before. Funds that really pay that much as regular income (for example option-income funds paying every week or month) are not tagged. In the DScore, one big payout year is counted at a normal level, so it is not read as growth followed by a cut; a payout that comes at the same time every year counts as normal pay.
Dividend Aristocrat
An S&P 500 company that has raised its dividend for at least 25 straight years. The long streak signals a durable, disciplined business, and is a hallmark of dividend-growth investing.
Fund & company types
Asset Structure
What the instrument actually is, which changes how you read it and how it is taxed. A Stock is a single company; an ETF, Mutual Fund or CEF holds a basket. Some structures pass most income straight through: a BDC lends to private firms, a REIT owns real estate, an MLP runs pipelines. These explain unusually high yields and why earnings or book value are read differently for them.
ETF (Exchange-Traded Fund)
A basket of holdings that trades on an exchange like a stock all day. Shares are created and redeemed on demand, so the market price stays essentially equal to the fund's NAV. Generally tax-friendly, and dividend ETFs usually pay mostly qualified dividends.
Mutual Fund
An open-end fund you buy and sell directly with the fund, priced once a day at its NAV (its ticker is typically five letters ending in X). It creates and cancels shares as money flows in and out, so the price always equals NAV. It can hand you a taxable capital-gains distribution most years, even if you did not sell.
CEF (Closed-End Fund)
A fund that raised money once and has a fixed number of shares, which then trade on an exchange like a stock. Because the share count is fixed, the price can drift above (premium) or below (discount) its NAV. CEFs are the high-yield "income" funds where destructive return of capital shows up most, so watch the NAV trend.
BDC (Business Development Company)
A company that lends to and invests in small and mid-sized businesses, and by law pays out most of its taxable income as dividends. Its reported earnings swing with non-cash portfolio mark-ups and mark-downs, so dividend safety is judged on Coverage (net investment income), not the earnings payout ratio. Its payout is mostly ordinary income, so it often fits better in a retirement account.
REIT (Real Estate Investment Trust)
A company that owns income-producing real estate and pays out most of its income as dividends. Property depreciation depresses its net income, so dividend safety is judged on Coverage (operating cash flow, an FFO proxy). Mortgage REITs, which own loans and mortgage bonds instead of buildings, are judged on whether their book value held up while paying the dividend. Its payout is mostly ordinary income (often with some return of capital), so it too tends to fit a retirement account.
MLP (Master Limited Partnership)
A business (almost always energy pipelines) that trades like a stock but is legally a partnership. You are a partner, not a shareholder, so you get a K-1 tax form instead of a 1099, and much of the payout is return of capital. Unusually, an MLP belongs in a taxable account, not an IRA (where it can create taxable "UBTI"), and is often impractical for non-US investors.
Discount / Premium to NAV
How the market price compares to the NAV. Trading below NAV is a "discount", above it a "premium". A discount can be an opportunity or a warning; it only really applies to CEFs and BDCs (open-end ETFs and mutual funds trade at NAV).
Preferred shares
A hybrid between a stock and a bond. It pays a fixed dividend (no growth), ranks above common stock but below bonds if the company fails, and usually has no voting rights. It behaves like a bond, so its price falls when interest rates rise; watch whether it is callable (the issuer can buy it back) and the issuer's credit quality.
ADR (American Depositary Receipt)
A US-listed wrapper that lets you buy a foreign company (say Nestle or Toyota) like a normal US stock. Dividends usually face withholding tax by the company's home country, and some ADRs charge a small custody fee that trims the payout.
Company fundamentals
EPS (Earnings per Share)
The company's net profit divided by its shares: how much profit it earns per share.
EPS = Net Income / Number of SharesP/E Ratio (Price-to-Earnings)
The share price divided by earnings per share: how many dollars you pay for each dollar of annual profit. A rough gauge of how cheap or expensive a stock is versus its earnings.
P/E = Share Price / EPSBeta
How volatile the share price is versus the broader market (about 1.0). Above 1 means it moves more than the market, below 1 means less.
Market Cap
The total market value of the company, its share price times all its shares. Rough size gauge: large caps are steadier, small caps more volatile.
Market Cap = Shares Outstanding x Share PriceAvg. Volume
The average number of shares traded per day over a recent period (typically 3 months). A proxy for how actively the stock trades.
Liquidity
How easily you can buy or sell without moving the price, estimated from the average daily trading value. Higher is easier to trade.
Liquidity ~ Avg. Volume x Share PriceNet Profit Margin
The share of revenue left as profit after all costs, interest and taxes. Higher margins point to a more efficient, more resilient business.
Net Profit Margin % = (Net Income / Revenue) x 100Analyst rating
What Wall Street analysts who follow the stock currently say: Strong Buy, Buy, Hold, Sell or Strong Sell, with how many analysts are on each side. Shown for US-listed stocks only (ETFs and funds have no analyst ratings) and refreshed every quarter. It is independent of DividendsIQ's own D/T/R scores, a separate outside opinion you can weigh alongside them.
Buyback (share repurchase)
When a company uses cash to buy back its own shares instead of (or alongside) paying a dividend. Fewer shares means each remaining one owns a bigger slice, which tends to lift earnings-per-share and the price, with tax deferred until you sell. Total shareholder return = dividends + buybacks, so judging a company on its dividend alone can understate how much cash it returns.
Taxes
Qualified vs Ordinary dividends
Qualified dividends are taxed at the low long-term capital-gains rate (0/15/20% in the US); most normal company dividends qualify if you hold long enough. Ordinary dividends are taxed at your regular income rate, which can be much higher; BDCs and REITs mostly pay this kind. Same headline yield, very different after-tax result. See the tax guide.
QDI (Qualified Dividend Income %)
The share of an ETF's dividends that counts as qualified (taxed at the low rate) rather than ordinary income. Shown for US ETFs, using each issuer's verified prior-year figure. A higher QDI % means a more tax-efficient payout.
Gross vs Net (Dividend)
Gross is the dividend before tax; Net is what you keep after dividend withholding tax. Use the Gross/Net toggle to see yields on either basis; Net applies each holding's own tax rate, or your default dividend tax when none is set.
Withholding tax & foreign tax credit
Withholding tax is tax a country holds back on a dividend before it reaches a foreign investor (for example the US withholds on dividends paid abroad; other countries do the same on their own stocks and ADRs). A foreign tax credit lets you claim that withholding back against your home tax so you are not taxed twice, but inside a tax-sheltered account (like an IRA) there is no bill to credit against, so the withholding is simply lost. See the tax guide.