Dividend payments steadiness score

The dividend payments steadiness score measures the variability in a company's dividend payment stream from one period to the next over the past seven accounting periods. The proxy used to measure stability is based on the discrete total variation of the factor relative to its mean.

How to use the score

A high score indicates that there have been no large decreases in dividend payments in recent accounting periods and that, if any variation has occurred, it has mostly been upward. A low value indicates that most of the changes in dividend payments have been downward.

The following table can be used as a reference for this score:

Score value range	Interpretation
0 to 5	Large negative variation in dividend payments
5 to 7	Small negative variations in dividend payments
7 to 10	Stable or increasing dividend payments

Importance of the steadiness scores

Our valuation model uses past accounting variables to estimate a company's future evolution. The past stability of these variables allows us to predict that this stability will be maintained in the near future. Therefore, the scores calculated by Gradement are based on an expected behavior of the company and are more valid for making investment decisions.

A lack of stability in accounting variables, reflected in a low steadiness score, makes it difficult to estimate the company's future evolution and therefore devalues the usefulness of our calculated scores.