For Dividend investors
Yield without the trap.
Find dividend-payers that are not bleeding. We score 44,722 stocks daily on accounting integrity, free-cash-flow coverage, and Beneish manipulation flags - so your yield is real, not a melting ice cube.
· Reviewed by Javier Sanz, ValueMarkers Founder
The pain we solve for dividend investors
Most dividend screens just sort by yield. That is how you end up holding T or VFC at the wrong time. We add the integrity layer that filters out cuts before they happen.
Must-haves we built in
- Yield >= X% AND payout-ratio <= Y% AND Piotroski >= 6
- Beneish M-Score < -1.78 (no manipulation)
- FCF coverage of dividend >= 1.5x
- No dividend cut in last 5 years
- Sector-balanced (cap any single sector at 20%)
VM features tailored to you
- Dividend-Aristocrats screener (Piotroski-filtered)
- Coverage-ratio alerts (notify when cushion < 1.2x)
- DCF with explicit dividend reinvestment overlay
- Watchlist alerts on payout ratio breach
How we filter dividend investor candidates
For dividend investors, ValueMarkers layers four independent quality checks on top of headline yield. First, payout-ratio gate: dividends consume less than 60% of GAAP earnings, leaving cushion for a 30% earnings drop. Second, free-cash-flow coverage: trailing-twelve-month FCF must cover the declared annual dividend at least 1.5x - because earnings can be manipulated but cash leaving the building cannot. Third, Piotroski F-Score above 5: this 9-point accounting test penalizes companies with declining margins, rising leverage, or share dilution - all early warning signs of an unsustainable distribution. Fourth, Beneish M-Score under -1.78: this 8-variable earnings-quality test flags managements who may be inflating reported income, which usually precedes either a restatement or a dividend cut. A name passing all four is what we call dividend-integrity-clean. The screen runs daily on 44,722 stocks across 73 exchanges; the resulting list typically contains 200-350 names and refreshes after every earnings cycle.
Building the screen step by step
In the screener, start with a base yield filter (4-6% is the sweet spot for safe-yield income; 6-10% requires extra care). Layer Piotroski F-Score >= 6 and Beneish M-Score < -1.78 to filter for accounting integrity. Add a payout-ratio filter (< 65% for industrials and consumer staples, < 75% for utilities). Then sort by 5-year dividend CAGR descending - the highest-quality names will be growing the dividend at 5-12% annually. Finally, cap sector exposure at 20% per sector in your selection. The resulting basket typically holds 12-25 names and produces a portfolio yielding 4.0-5.5% with very low dividend-cut risk historically. Re-run quarterly.
Common mistakes dividend investors make
Dividend investors most often go wrong in three ways. (1) Anchoring on headline yield without checking coverage - a 9% yield with 0.9x FCF coverage is a future cut, not income. (2) Ignoring sector concentration - heavy weighting into REITs, midstream MLPs, or utilities creates correlated risk; a Fed pivot moves all three simultaneously. (3) Treating Aristocrat or King status as a guarantee - VF Corporation was an Aristocrat for 50 years before cutting the dividend 70% in 2023, with both Piotroski and Beneish flashing red 18 months before the cut. Treat the streak as a signal, not a shield.
Case study: VFC
18 months before VFC cut its dividend, our Piotroski flipped from 7 to 4 and Beneish M-Score crossed -1.78. Two integrity flags. Yield-only screens still showed VFC as a buy at the time.
Case studies illustrate how the ValueMarkers screen flagged this name historically; they are research examples, not investment recommendations. See our full disclaimer.