Dividend Health

Every member carries a Dividend Health Score, from 1 to 99, computed by us from filed accounts rather than taken from the index. Five things go into it: whether earnings and free cash flow cover the payout, the balance sheet behind it, the payment record including cuts, how steady the underlying business is, and what analysts expect earnings to do from here. The figure at the top weights each member's score by its share of the list's projected income, printed beside every score below, not by its weight in the fund. The full method is on our Dividend Health Score page.

Two things shape how the spread reads on SCHD in particular. The Dow Jones U.S. Dividend 100 already ranks its candidates partly on cash flow against total debt, and admits only companies with ten unbroken years of payments, so the weakest cases rarely get in. Against that, the fund holds a long tail of banks and insurers, which we score on a separate variant with a lower ceiling, because bank accounts do not support the same coverage tests. Those members cannot reach the top of the scale however strong they look elsewhere on the page.

How the Dividend Health Score works