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Frequently asked questions
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Why does catching a dividend cut early matter?
A dividend cut is rarely an isolated event — it's often a leading signal of deeper financial stress. The Hartford Funds annual study "The Power of Dividends", drawing on Ned Davis Research data going back to 1973, has consistently shown that S&P 500 dividend growers outperform dividend cutters by roughly 10 percentage points per year on a compounded basis. The price reaction tends to extend well beyond the announcement day: academic work on post-announcement drift suggests markets do not fully price the news instantly, leaving a window for informed holders to act.
What does the safety score actually predict?
It does not predict the future. The score is a present-tense reading of dividend-paying fundamentals — payout ratio, cash flow coverage, debt level, and growth track record — calibrated against historical cut patterns. It tells you whether a dividend is currently well-covered or showing signs of stress. Most dividend cuts are preceded by months or quarters of deteriorating fundamentals; those, our score flags. Cuts driven by external shocks (a pandemic, a regulatory action, an oil-price collapse) or one-off corporate events (a spin-off-driven dividend cut) often arrive with little or no prior balance-sheet signal — those, no fundamentals-based algorithm can catch in advance.
What does the research say?
Several converging findings: the Michaely, Thaler and Womack (1995) study in the Journal of Finance documented that the underperformance following a dividend omission continues to drift down for years, not just on announcement day. Bernard and Thomas (1989) established the same delayed-price-response pattern for earnings surprises in the Journal of Accounting Research. Hartford Funds' annual "Power of Dividends" report consistently shows growers vastly outperforming cutters over multi-decade horizons. Readers are encouraged to consult these sources directly for the latest figures.
How does the algorithm handle REITs, banks, and utilities?
Different industries need different yardsticks. Using the same one for everyone would punish perfectly healthy companies. Three examples. REITs (real-estate trusts like Realty Income) are legally required to pay out most of their income, and their accounting numbers make their payout ratio look like 200% even when the dividend is comfortable — we adjust for that. Utilities (like Duke Energy or NextEra) reinvest billions every year in grid build-out, so if we judged them on "cash left over after spending" the way we'd judge a software company, every healthy utility would fail — we use a measure that ignores grid-building spend. Banks (like JPMorgan or Goldman Sachs) aren't industrial companies: their customer deposits show up as "debt" on the balance sheet, and their cash flow swings with their trading desk, so neither number tells you anything useful about dividend safety. For banks we only look at whether they can sustain the payout and how long they've been raising it. The Learn page shows the exact adjustments for each industry.
Why did the algorithm miss [some past cut]?
There are two common reasons. First, the cut may have been driven by an external shock that isn't visible in the company's balance sheet — COVID-driven suspensions in 2020 are the classic example, as are Fed-mandated bank restrictions and oil-price collapses. Second, the cut may have followed a corporate action (a spin-off, a strategic pivot) that didn't leave a clean financial signal beforehand. We are transparent about this on the Learn page: we are a deterioration detector, not a prophet of corporate events.
What stocks can I track?
Currently US-listed stocks only (NYSE, NASDAQ, OTC). For foreign companies, search by their US ADR symbol — e.g., ENGIY for Engie, BABA for Alibaba, NVO for Novo Nordisk. Most major non-US dividend payers have an ADR available.
How quickly will I be alerted?
Our system checks dividend data once per day. When a cut, suspension, or elimination is detected, an email alert is sent within minutes. Most cuts are caught within 24 hours of being announced by the company.
What counts as a dividend cut?
Three event types trigger an alert: a Cut (new declared dividend is lower than the previous one), a Suspension (an expected payment was skipped), or an Elimination (the company has stopped its dividend program).
Where does the data come from?
We use a well-established financial data provider that sources from official company announcements and exchange filings.
Can I track stocks that don't pay a dividend?
No. The service exists specifically to alert on dividend changes, so non-dividend-paying stocks (e.g., Tesla, Berkshire Hathaway) cannot be added to your watchlist.
How do I cancel my Pro subscription?
Open the Settings page and click "Manage subscription" under Account. This opens the Stripe portal where you can cancel at any time. Pro access stays active until the end of the current billing period.
Where do alerts get sent?
By default, to your account email. You can set a different notification email in Settings if you'd prefer alerts go elsewhere.
Do you give financial advice?
No. DividendsCut is purely an information service. We notify you when something changes — what you do with that information is your decision. See our Terms of Service for the full disclaimer.