12-15-2021, 05:19 AM
The issue with these kinds of things is not so much the math or the numbers used. It's the fact that what this guy is trying to do is impossible.
You cannot take a company, especially a massive company with millions of moving parts, and come up with a single number to describe the quality of the company. The whole logic is flawed.
Can these numbers be effective as general guidelines? Sure. I get that here you are looking at current yield + historical yield growth + dividend safety (which is already is not a factual number, but rather the best guess of some algorithm) and that will give you some sort of an idea about the historical performance of the company's dividend. But that is a tiny tiny part of a company, an important part sure, but ranking a company solely based on historical dividend data is not the right way to go in my opinion.
You cannot take a company, especially a massive company with millions of moving parts, and come up with a single number to describe the quality of the company. The whole logic is flawed.
Can these numbers be effective as general guidelines? Sure. I get that here you are looking at current yield + historical yield growth + dividend safety (which is already is not a factual number, but rather the best guess of some algorithm) and that will give you some sort of an idea about the historical performance of the company's dividend. But that is a tiny tiny part of a company, an important part sure, but ranking a company solely based on historical dividend data is not the right way to go in my opinion.