Methodology Center

🛡 Dividend Safety Score

A 0–100 estimate of how reliable a dividend is. Validated against history: stocks scoring ≥70 had roughly 0–4% recent dividend cuts; stocks under 40 had ~56%. It is the weighted sum of five components.

• Sustainability (payout ratio)30
  The heaviest factor. A lower payout ratio (dividend vs earnings) is safer. Sector-aware: REITs get a wider band because GAAP payout overstates their risk without FFO.
• Track record (streak)25
  Consecutive years of non-declining dividends. 15+ years earns the maximum; a sustained history predicts safety far better than a recent jump.
• Growth (5-year)20
  5-year dividend growth, sweet spot ~8–15%/yr. Gated by the track record and spikes are penalised — a big recent ramp with no history is a red flag (cyclicals raise the payout right before cutting it).
• Yield15
  A sweet-spot curve peaking at 2.5–5.5%. Extreme yields are penalised, not rewarded (a yield-trap guard).
• Frequency10
  Monthly > quarterly > annual. A convenience for reinvestment, not a real safety signal — hence the smallest weight.

📊 Valuation Context

Whether the stock looks attractively or expensively valued right now — context, never a price target or a recommendation.

• Yield vs its own 5-year history
  Where today's dividend yield sits within the stock's last 5 years (a percentile). A yield high in its range means the stock is more generous than usual — often a sign it has become cheaper.
• Peer comparison
  The stock's metric (dividend yield or P/E) versus the median of a comparable group, chosen by asset family first, then sector.
• Analyst data
  The consensus analyst price target versus the current price (the implied upside %). Market context, not our opinion.
• Value-trap logic
  A high yield combined with a weak safety score and/or a recent dividend cut flags a possible value trap — the yield looks high only because the price fell on bad news.

🧭 Portfolio Exposure

Where your capital and your income are concentrated. All percentages are of the current portfolio (or of annual dividends for income).

• Sector exposure
  Share of your portfolio's market value in each sector (Financials, Real Estate, Technology…). A sector above 30% is flagged.
• Asset family exposure
  Share of value by investment type. Default comfort targets flag over-concentration: BDC 25%, equity REIT 20%, mREIT 15%, crypto/speculative 10%. Above target / far above target (1.5×) are shown.
• Income exposure
  Share of your annual dividends from each family. A single family above 35% of income is flagged as high income concentration — income often differs from value (high-yield families generate more income than their weight).

🏢 REIT Risk Score

A REIT / mREIT / BDC-specific risk score from 0–100 (LOW 0–30 · MEDIUM 31–55 · HIGH 56–100), built from seven weighted factors. Weights differ by category; a factor with no data is excluded and the rest are renormalised.

Lower is safer. Each factor's contribution and data quality are shown on the REIT asset detail page.

⏱️ Data Trust

How fresh and complete the data behind a number is — so you know how much to lean on it.

• Confidence
  High = complete and fresh data; Medium = 1–2 missing or stale signals; Limited = 3 or more. Stale data is never rated High.
• Data sources
  Prices, dividends and fundamentals come from Yahoo Finance, refreshed daily. REIT Center metrics are manual, parsed from 10-Q filings, or live — each tagged with its source and confidence.
• Stale data
  A cache row older than 24 hours is flagged as stale.
• Unknown / incomplete data
  Flags for: sector unknown, dividend history incomplete (under ~5 years), analyst coverage limited, and valuation inputs missing.

📖 Glossary

Yield

Annual dividend divided by the current share price — the income rate you get at today's price.

Yield on Cost (YoC)

Annual dividend divided by what YOU paid (your cost basis) — your personal yield, not the market's.

Payout Ratio

The share of earnings (or FFO/AFFO for REITs) paid out as dividends. Lower leaves more cushion.

AFFO

Adjusted Funds From Operations — a REIT's recurring cash flow after maintenance capex; the strictest base for judging dividend coverage.

NAV

Net Asset Value — the per-share value of a fund's assets minus liabilities. A price below NAV is a discount, above is a premium.

P/FFO

Price to Funds From Operations — the REIT equivalent of a P/E ratio; how many times cash flow you pay for the shares.

Dividend Cut

A reduction in the dividend versus the prior period — a key reliability warning.

DRIP

Dividend Reinvestment Plan — automatically using dividends to buy more shares, compounding income over time.

SWR

Safe Withdrawal Rate — the share of a portfolio you can withdraw yearly without running out (the classic rule of thumb is ~4%).

FIRE

Financial Independence, Retire Early — having enough invested that the income covers your expenses.