Strategy profile

Dividend Quality: 4 Factors | Backtest & Top Stocks 2026

Continuity, payout ratio, yield and growth in one score: identify reliable payers, avoid dividend traps, automated and refreshed daily.

Save the strategy and StockScorer checks its rules for you every day. You'll get a heads-up whenever a stock crosses the upper or lower score threshold.

✓ Refreshed daily✓ Rule-based: no black box✓ Fully customisable
Total return in the backtest10 years to Q2 2026
Strategy
+220.4%
MSCI World
+240.1%

Gap to MSCI World: -19.7 percentage points total, -0.7 per year

81150220290359StartQ2 2017Q3 2018Q4 2019Q1 2021Q2 2022Q3 2023Q4 2024Q2 2026StrategyBenchmark (MSCI World)

Index, start = 100

Past performance is not a reliable indicator of future results.

+12.4%Return p.a. (backtest)
-0.7 ppvs. MSCI World p.a.
16,182Stocks analysed
SmallMidLargeCap classes
Classification of all stocks as of the latest data

What the profile looks like today

As of 11/15/2026
630High
4,196Medium
11,356Low
Classification in the universe
High 4%Medium 26%Low 70%

Based on all 16,182 stocks with a score. Not rated are stocks that the profile does not classify because of a size limit or an exclusion rule.

Distribution of scores in the market
-4
-3
-2
-1
0
+1
+2
+3
+4
+5
Score distribution as a data table
ScoreNumber of stocksHigh matchMedium matchLow match
-4330033
-344500445
-248400484
-170600706
08,521008,521
+11,167001,167
+21,48501,4850
+31,76301,7630
+494809480
+563063000
Countries of the high-match stocks
US 35%JP 30%CH 10%CA 10%IE 5%Other 10%
How rules turn into a score

How the scoring works

Every stock runs through the same disclosed rules. The points add up to a score, traceable down to the individual rule.

01
Rules

Each rule checks a metric against a threshold, here for example “Dividend uncut for ≥ 10 years”.

02
Points & weighting

In this profile, each rule that is met counts +1 to +2 or −1 to −2 points.

03
Score & classification

The sum is the score. That gives three classes: high, medium, low match.

Low match
< 2 points
Medium match
2 – 4 points
High match
≥ 5 points

These terms describe only the match with the criteria, not a recommendation to buy or sell.

What the strategy measures a stock against

What is behind this strategy?

Profile of a stock with a high match
High match · Profitability: 33%High match · Growth: 0%High match · Valuation: 100%High match · Quality: 67%Market average · Profitability: 15%Market average · Growth: 11%Market average · Valuation: 46%Market average · Quality: 16%50%100%ProfitabilityGrowthValuationQualityHigh matchMarket average
01
How reliable is the dividend?

Years without a cut are the hardest evidence of a resilient payout policy.

02
Is it truly earned?

The payout ratio based on earnings per share exposes substance payers.

03
Is the yield worthwhile?

A yield above 1% ensures there is a substantive distribution at all.

04
Is the payout growing?

At least three raises in ten years, including the most recent one, count as a genuine growth signal.

Excerpt from the rule profile

These exact rules run over every stock daily.

4 of 8 rules
Dividend Streakisat least10+2 pts
Group:AND
+1 pts
Dividend Streakisat least5
Dividend Streakisless than10
All of these conditions must be met
Group:AND
+1 pts
Payout Ratioisat least25%
Payout Ratioisless than75%
All of these conditions must be met
Group:AND
−1 pts
Payout Ratioisat least75%
Payout Ratioisless than90%
All of these conditions must be met
+ 4 more rules in the profile

After signing up for free, you can copy the full profile in the rule editor, adjust its thresholds, and save it as your own starting profile.

See and copy all rules for free
What the backtest shows, and what it does not

How has the profile performed?

Strategy: +220.4%Benchmark (MSCI World): +240.1%
81150220290359StartQ2 2017Q3 2018Q4 2019Q1 2021Q2 2022Q3 2023Q4 2024Q2 2026StrategyBenchmark (MSCI World)

Index, start = 100

The backtest shows a total return of +220.4%. The MSCI World reaches +240.1% over the same period.

+12.4%Return p.a.
+13.0%Benchmark p.a.
-25.5%Largest decline
0.76Sharpe Ratio
Spread by start date

The same strategy with the same settings, started at every possible date. Each dot is a separate run over 5 years.

10%12%14%16%Start Q2 2016: 16.2% p.a., MSCI World 13.5% p.a.Start Q3 2016: 16.1% p.a., MSCI World 13.2% p.a.Start Q4 2016: 16.9% p.a., MSCI World 13.8% p.a.Start Q1 2017: 13.7% p.a., MSCI World 11.8% p.a.Start Q2 2017: 13.7% p.a., MSCI World 9.9% p.a.Start Q3 2017: 13.6% p.a., MSCI World 9.4% p.a.Start Q4 2017: 13.1% p.a., MSCI World 8.7% p.a.Start Q1 2018: 15.9% p.a., MSCI World 11.0% p.a.Start Q2 2018: 14.0% p.a., MSCI World 10.6% p.a.Start Q3 2018: 11.2% p.a., MSCI World 9.5% p.a.Start Q4 2018: 14.7% p.a., MSCI World 13.8% p.a.Start Q1 2019: 15.0% p.a., MSCI World 13.2% p.a.Start Q2 2019: 11.8% p.a., MSCI World 13.3% p.a.Start Q3 2019: 14.1% p.a., MSCI World 12.8% p.a.Start Q4 2019: 12.6% p.a., MSCI World 13.0% p.a.Start Q1 2020: 14.5% p.a., MSCI World 16.8% p.a.Start Q2 2020: 9.6% p.a., MSCI World 13.7% p.a.Start Q3 2020: 14.4% p.a., MSCI World 14.6% p.a.Start Q4 2020: 15.3% p.a., MSCI World 13.4% p.a.Start Q1 2021: 9.0% p.a., MSCI World 10.8% p.a.Start Q2 2021: 11.1% p.a., MSCI World 12.5% p.a.Q2 2016Q4 2018Q2 2021
  • Strategy
  • MSCI World
  • Median 14.0%
Median
14.0%
Mean
13.6%
Range
9.0% to 16.9%
Standard deviation
2.1 percentage points
Ahead of MSCI World
14 of 21 runs

The periods overlap heavily, neighbouring runs share almost all periods. The spread therefore looks smaller than it would for independent periods. Past results say nothing about future ones.

Strategy calculated without fees and taxes, dividends reinvested.

Point-in-time composition since June 30, 2009: each period uses the members at that time. Stocks that left the market early may be missing, which favours the result.

Historical period, quarterly rebalancing. Past performance is not a reliable indicator of future results.

The way of working this profile suits

Who is this strategy for?

For income investors with a long horizon who value predictable distributions over maximum price upside, without falling for the classic dividend trap.

Adopt this strategy for free
What people usually ask before starting

Frequently asked questions

How does this differ from the DividendenAdel approach?
The four-factor principle (continuity, payout, yield, growth) follows the magic square popularised by Christian W. Röhl. StockScorer implements it as its own point system with automated metrics and has no affiliation with the trademark owner.
Why are very high dividend yields not rewarded?
Because statistically they are more often a warning sign than an opportunity: an 8% yield usually comes from a halved share price. The square rewards coverage and continuity instead, the drivers of reliably sustainable payouts.
Is this a recommendation to act?
No. StockScorer provides automated, rule-based assessments for information only. Nothing here replaces individual financial advice or constitutes a solicitation to buy or sell securities.
Can I adjust the payout bands?
Yes. After free registration you can copy the profile and modify it in the rule editor: bands, point values and thresholds are fully configurable.
Why does growth now count via raises instead of a growth rate?
Because it is closer to the DividendenAdel methodology sheet: Röhl requires at least three raises in ten years, including the most recent one, not a fixed percentage growth rate. The earlier 5-year CAGR threshold was an approximation, not an original requirement.

Method & Criteria

A high dividend yield alone is no mark of quality. Often it is merely the result of a collapsed share price. The 4-factor check therefore tests the magic square of dividend quality, as popularised by Christian W. Röhl with his DividendenAdel approach: Has the dividend gone uncut for years? Is it covered by earnings (25–75% payout)? Does it offer a real base yield? And has it been raised at least three times in the past ten years, most recently just lately? Substance payers (companies funding their dividend from the balance sheet or on credit) are punished hard.

How does the 4-factor check work?

Continuity: a dividend uncut for at least ten years earns +2 points, five to nine years +1. Payout ratio: if the dividend sum amounts to 25–75% of earnings per share, the balance counts as healthy (+1); 75–90% leaves little buffer (−1); from 90% of earnings, or with a dividend paid without an earnings base, it is substance distribution (−2). On top come +1 for a yield above 1% and +1 for a growth signal: at least three raises in the past ten years, including the most recent one; a dividend cut in the past year costs 2 points.

The score ranges from −4 to +5; the upper threshold is a uniform 5 points across all size classes. A high match therefore demands all four factors at once, the original is a strict pass/fail test across the whole square: yield alone is never enough.

The four factors at a glance

Continuity: years without a dividend cut (≥ 10 years: +2, 5–9 years: +1).

Payout ratio (earnings basis): 25–75% ideal (+1), 75–90% critical (−1), from 90% or without an earnings base: dividend trap (−2).

Yield: above 1.0% (+1), as a minimum return, not a maximisation target.

Growth: at least 3 raises in 10 years, including the most recent one (+1); cut in the past year (−2).

Strengths, limits and calculation notes

The square's strength: it punishes exactly the constellation that classic dividend rankings reward, optically high yields created only by falling prices or uncovered payouts.

Calculation note: since the fidelity round (23 August 2026), the payout ratio runs on an earnings basis (dividend per share relative to earnings per share), as described in the DividendenAdel methodology sheet, replacing the previously used free-cash-flow approximation. Röhl's own three-year smoothing of the payout ratio cannot be mapped with daily data and remains a documented simplification. The growth criterion now counts raises instead of a CAGR threshold, closer to the original than the earlier five-year growth rate. Continuity measures years without a cut, the even stricter view of “years with an increase” gets its own strategy.

Who is this strategy for?

For income investors seeking dividend quality rather than dividend size, as a core strategy or as a filter over their own watchlist.