☕️ Sunday Coffee: One More Secret Sauce of MaxDividends Strategy
Introducing the Financial Score – your go-to metric for picking the best stocks for your portfolio.
MaxDividends is subscriber’s supported newsletter with community and community member’s tools to start building long-term growing passive income to live off dividends.
As the founder and CEO of the BeatMarket (beatmarket.com) & MaxDividends, I actively use the project’s developments when choosing stocks for investment. In the case of MaxDividends, we use the Financial Score at the final stage of candidate selection, selecting only companies with a score of 80+. Today I would like to talk more about what Financial Score is.
What is the Financial Score?
Financial Score is a rating system based on a company's fundamental metrics. It ranges from 20 to 99, with higher scores indicating stronger companies.
Stocks rated 80+ are considered high-quality, while those rated 50 or below are seen as weaker investments.
This score helps you quickly sift through thousands of stocks to build unique investment strategies that boost your returns.
Global vs. Local Scores
The Financial Score has two components: Global and Local. The Global Score assesses a company's strength worldwide, while the Local Score focuses on its performance within its country.
Both scores use the same metrics but are ranked separately to help you identify local market leaders.
Coverage and Methodology
Our team evaluates over 20,000 companies worldwide, including:
- North America: USA, Canada
- Europe: UK, Finland, Sweden, Norway, Denmark, France, Italy, Spain, Germany, Poland, Netherlands, Belgium, Portugal, Ireland
- Asia and Oceania: Japan, Australia, China, India
We gather financial data daily and analyze the past 25 years of reports to ensure robust evaluations. This long-term perspective helps us assess a company's resilience during economic downturns.
Financial Score Comprises 3 Key Components
1. Growth Evaluation
We analyze data on sales, operating profit, net income, earnings per share, return on equity, and the trends of these metrics.
It's crucial for us to understand if the company is growing and developing rather than stagnating and incurring losses.
2. Dividend Policy Evaluation
A consistent management approach to investor relations indicates a transparent governance structure and strong management. The dividend policy is a significant aspect of analyzing any public company.
At MaxDividends, we analyze the presence or absence of dividend payments, the overall payment trends, and the frequency of payments. It's important that dividends are paid from current income, not from past profits or loans. We look at the dividend per share and the percentage of profit allocated for distribution.
When a company consistently pays or does not pay dividends, regularly increases them, or directs all funds towards development, it indicates a well-planned business management and development strategy.
We also pay attention to the presence of share buyback programs. When a company buys back shares, it indicates management's confidence that the shares are undervalued.
3. Stability Evaluation
In this section, we assess the company's overall financial health. This includes the ratio of total assets to total liabilities, the ratio of current assets to current liabilities, the debt-to-equity ratio, and growth sustainability. It's crucial for a company to have a cushion to operate effectively during a market crisis.
Each section (Growth-Dividend-Stability) has a maximum score of 5. If a company meets all the top-tier business criteria, it scores 15 points.
The system then ranks companies and converts the evaluation into the Financial Score. The Global Financial Score considers all evaluated companies worldwide, while the Local Financial Score only considers companies within a specific country.
Why This Matters
Buy Healthy Businesses, Sell Stagnating Ones
Historically, companies with a rating of 90 and above significantly outperform those with lower ratings. Check out some results comparing the performance of stocks with high ratings (90+) against those with low ratings (60 and below).
Choosing stocks based on the analysis of a company's fundamental metrics is a wise investment of your time to identify the best businesses. The Financial Score helps MaxDividends Team to quickly identify leaders and laggards in long-term investing.
My High Yield Dividend Growth Story
Retire Early and Live Off Dividends. $12,000 monthly for 120 months
My name is Max, nice to meet you! I am an entrepreneur, dad to three, and a private investor in stocks. Pick up high-yield dividend growth stocks to live off dividends and retire early.
The idea of growing passive income typically dawns on us when we realize we’re no longer in our twenties. For me, this realization hit around age 35. I don’t plan to run a business my entire life—I have big plans for other areas of my life too. I enjoy writing, blogging, and sharing my experiences. Retire early before 50 is the main mission for me now.
Ten years ago, I started investing in growth stocks. By now, the capital from those investments and my past savings have allowed me to start implementing my planned strategy. In the early years, I focused primarily on growth stocks, but over the past few years and especially in recent months, I’ve shifted more towards high-yield, dividend growing stocks.
At this stage in my life, predictable growing passive income is more important than the long-term price appreciation of stocks, because I plan to live off the dividends.
🙏 To focus on what we love, we need stop worrying about daily expenses. For me, the solution was creating a growing passive income stream through dividend stocks.
As an author of the MaxDividends Strategy I follow it to pick up high-yield & dividend growth stocks to live off dividends and retire early. I share my way and methodology of achieving the dream goal to live off dividends step by step.
MaxDividends Key Concept
Predictability in important things is the foundation of peace of mind. Peace of mind is the basis of financial well-being. MaxDividends is all about peace of mind.
At MaxDividends, we focus on a dividend growth strategy. It’s a great fit for investors who want capital appreciation, a decent level of safety, and growing income.
As the name suggests, dividend growth investing is all about finding stocks that pay dividends and can keep growing them over time.
👉 Max’s Portfolios with all updates and ideas
MaxDividends Stocks are Unique
They not only provide income but have a strong track record of increasing that income over the years.
Plus, investing in companies that consistently raise dividends has historically been a solid strategy. And the most important thing here is that not only I and my investments participate in the accumulation, but also the companies themselves.
👉 Full list of MaxDividends Stocks
Every week on Fridays, I make purchases according to the plan and post the strategy results on the MaxDividends blog. I enter my purchases in the MaxDividends App and it automatically calculates my dividend income forecast.
Do you know what is the power of the MaxDividends strategy? It is that even if I stop investing right now, my dividend income will continue to grow. And even a conservative forecast says that in the next 10 years the growth will be 4 times.
MaxDividends Strategy
My Own Dividend Story
To see how the MaxDividends strategy works in practice, I started an experiment: Goal - $12,000 in dividends per month after 120 months.
I calculated that by investing $12,000 a month with a starting capital of $ 0.00 😳 and reinvesting dividends, I will reach my goal in ~120 months. Until the end of the experiment, I will reinvest all received dividends back.
🚴 Year 1: ~10% of the Goal
🚴 Year 5: ~45% of the Goal
🏆 Year 10: 100% of the Goal
👉 Max’s Portfolios with all updates and ideas
Stay tuned!
MaxDividends Mission
Help & support everyone on the way to build growing passive income, retire early and live off dividends.
Build your own dividend machine with MaxDividends to launch growing passive income, retire early and live off dividends with community like-minded
MaxDividends Community
MaxDividends is subscriber’s supported newsletter with community and community member’s tools to start building long-term growing passive income to live off dividends and retire early.
Stories of Success
🏆 Mary: “Help me get started with you”
🏆 Jurgen: “I am done with guessing where the market’s heading”
🏆 Ann: “What will my life look like in 15 years?”
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Posts & Podcasts with deep dives into the top dividend stocks we hold. Key points, current statement, perspectives and consensus.
My personal MaxDividends portfolios and short list with all the changes and updates weekly.
Comprehensive tool to help you on the way retire early and live off dividends.
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FAQ
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👉 MaxDividends Roadmap to Early Retirement with Living Off Dividends