How are Dividend Quality Scores computed?

Our Dividend Quality Score is based on our assessment of Dividend Quality, Dividend Quality Trend, and Dividend Coverage.

We assign the following star ratings for Dividend Quality:
High Quality Dividend:      4-stars
Medium Quality Dividend: 2-stars
Low Quality Dividend:       1-star


To evaluate Dividend Quality Trend we look at how many years out of the last 5-years the company has paid out High, Medium, and Low Quality Dividends.
Consistent High Quality Dividends:                          4-stars

Combination of High & Medium Quality Dividends: 3-stars 
All Medium Quality Dividends:                                 2-stars
Combination of Medium & Low Quality Dividends:  1-star
Persistent Low Quality Dividends:                            0-star

We look at the ending cash balance, with a Dividend Coverage multiplier in the following brackets:
<1x       0-star
1x<3x   2-stars
>3x       4-stars

To arrive at the overall Dividend Quality Score for a company we aggregate its scores for each of the three components above.
Note that unlike Fundamental Analysis scores which are based on a company's performance relative to its peers the Dividend
Quality score captures the quality, trend and coverage of a company's dividend. However, we do provide charts and graphs in
our Dividend Quality reports that show the dividend quality performance of the company relative to its peers.
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