TSI Dividend Sustainability Ratings

Article Excerpt

You can’t fake a record of dividends. That’s why we place a high value on a sustained history of dividend payments. When you’re looking for income-producing stocks, a high dividend yield should also be one of your most important investment considerations. But that shouldn’t come at the expense of sustainability. Our exclusive TSI Dividend Sustainability Rating System uses eight factors to determine a company’s ability to maintain its current dividend, and increase the payment over time. These factors are: 1. One point for a long-term (at least five years) record of dividend payments—two points for over five years of continuous payments. 2. Two points if the company has raised the payment at least once in the past five years. 3. One point for a public commitment by management to keep paying dividends. 4. One point for operating in a non-cyclical industry. Profits at businesses in cyclical industries, such as oil and mining, tend to move up and down with the overall economy. Sharply lower earnings could…