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Dividend Investing Cheat Sheet

Essential dividend metrics explained — yield, payout ratio, ex-dividend dates, dividend aristocrats, and DRIP strategies for income investors.

Key Dividend Metrics

Item	Value	Notes
Dividend Yield	Annual dividend ÷ share price	E.g., $4 div / $100 price = 4%
Payout Ratio	Dividends ÷ Net Income	< 60% is sustainable; > 80% = risky
Dividend Growth Rate	Annual % increase in dividends	5–10% growth is excellent
Earnings Per Share (EPS)	Net income ÷ shares outstanding	Must exceed dividend to sustain
Free Cash Flow Payout	Dividends ÷ Free Cash Flow	More reliable than EPS payout
Yield on Cost (YOC)	Current div ÷ original price	Grows as dividends increase

Item	Value	Notes
Declaration Date	Board announces dividend	Amount and dates confirmed
Ex-Dividend Date	Must own BEFORE this date	Buy before = get dividend
Record Date	1 day after ex-date	Shareholders of record get paid
Payment Date	Cash hits your account	Typically 2–4 weeks after record
Settlement (T+1)	Buy must settle before record	Buy at least 1 day before ex-date

Item	Value	Notes
Dividend Aristocrat	25+ years of consecutive increases	S&P 500 members only
Dividend King	50+ years of consecutive increases	Any publicly traded company
Dividend Achiever	10+ years of consecutive increases	Broad market, Nasdaq screened
Aristocrats count (2026)	~67 companies	Screened annually
Kings count (2026)	~54 companies	Rare multi-decade track records

Item	Value	Notes
Qualified dividends	0%, 15%, or 20%	Same as long-term capital gains rates
Ordinary (non-qualified)	Taxed at income rates	10%–37% based on bracket
Holding period (qualified)	60+ days in 121-day window	Around ex-dividend date
REIT dividends	Mostly ordinary income	20% QBI deduction may apply
Tax-advantaged accounts	No dividend tax in IRA/401(k)	Tax-deferred or tax-free

Item	Value	Notes
DRIP (Div Reinvestment)	Auto-buy more shares	Compounds growth — no commissions
DRIP + dividend growth	Snowball effect	More shares → more dividends → repeat
Target yield range	2.5% – 5.0%	Below 2% = slow; above 6% = risky
Diversification	20–30 stocks across sectors	Avoid single-sector concentration
$1,000/mo income goal	~$300K at 4% yield	Or $240K at 5% yield

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