Three out of four flawless stocks pay a dividend

2026-08-19 · By Lubin Danilo, founder of Lubin Investment

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Among the 95 stocks my screener rates as flawless today, 70 pay a real dividend, nearly three out of four. But among those payers, the average yield tops out at 1.7%, with a median of 1.3%. Perfect financial quality mostly funds growth and buybacks, rarely a generous income stream. The detail changes everything.

What the sample shows

I checked live, ticker by ticker, the 95 stocks my screener currently rates as flawless: 10 out of 10 financial criteria, the maximum score in my method. This sample matches the first page of my ranking by score, the site's public API's technical limit (it caps at 100 rows no matter what you request). Result: 70 of these 95 stocks, or 73.7%, actually pay a dividend. The other 25 distribute nothing.

The number that immediately tempers the enthusiasm: among the 70 payers, the average yield does not exceed 1.7%, and half of them sit below 1.3%. In other words, earning the maximum score on my grid guarantees neither a dividend nor, when one exists, a generous yield. It guarantees a healthy balance sheet, solid profitability, and disciplined capital management, which can translate into a dividend, into buybacks, or simply into more cash reinvested into growth.

The most generous yields in the sample

Here are the nine flawless stocks with the highest yield among the 70 payers. The ranking mixes very different profiles, from a US egg producer to an Asian stock exchange, and the full methodology behind my quality score stays the same for each one.

The Cal-Maine case: a yield that is not what it looks like

The highest yield in the sample deserves a detour, because it illustrates a classic trap. Cal-Maine Foods, the largest shell-egg producer in the United States, runs a variable dividend policy: the amount paid depends directly on the quarter's earnings, not on a fixed amount set in advance. When egg prices climb, the company distributes generously. When they collapse, it pays nothing.

That is exactly what just happened. An oversupply of conventional eggs pushed selling prices down more than 70% in a single quarter, driving Cal-Maine to a net loss of $35.9 million. Its variable dividend policy requires that cumulative loss be recovered first before payments resume: last quarter's dividend was therefore suspended. The 6% yield shown in the table above reflects past payments, not a guarantee for next quarter. Cal-Maine's latest filings are available on the SEC's site, for anyone who wants to follow the mechanism live.

The flip side: when the dividend shrinks

Two more signals worth watching in this same sample. First, the payout ratio: the share of yearly earnings sent out as a dividend rather than kept inside the company. A generous yield can rest on a payout ratio that is already very high, like Hong Kong Exchanges (84% of earnings distributed) or Grupo Aeroportuario Centro Norte (85%): little room left to keep raising the dividend unless earnings grow at the same pace. Second, seven stocks in the sample, including Kinross Gold, Mercury General and RenaissanceRe, pay a dividend whose amount has actually shrunk over five years, despite today's flawless quality score.

A high quality score describes the present: profitability, balance-sheet strength, capital discipline, all measured today. It does not guarantee the dividend's future path, which depends on a management choice renewed every quarter, not a promise baked into the score.

Big names that pay nothing at all

At the other end, 25 of the 95 stocks distribute no dividend at all, including several brands you probably run into every day.

This is not a red flag. These are companies choosing to reinvest every available cash dollar into their own growth or into buybacks rather than into a quarterly check. My method does not score any dividend-related criterion: it judges the ability to generate cash, not what the company chooses to do with it afterward.

Sector explains much of this split. All seven property and casualty insurers in the sample pay a dividend, without exception: this business collects premiums from policyholders before paying out claims, sometimes years later, and that lag structurally leaves cash available to distribute. By contrast, none of the four infrastructure software names in the sample pay one: their cash funds growth and buybacks instead of a dividend, a common choice among software vendors still expanding fast.

What I take from this to pick a stock

If you are after steady income, a flawless quality score is not the right filter on its own: it tells you the company is solid, not that it pays out. Look instead at the payout ratio (the share of earnings distributed: above 80%, the room to maneuver narrows) and the five-year trajectory, not just today's headline yield. It is the same principle I detail for total shareholder return, which adds dividends and buybacks together instead of stopping at the dividend figure alone.

And if you are after growth rather than income, the 25 stocks that pay nothing are not a flaw to avoid: it is often the sign of a deliberate capital-allocation choice. As Aswath Damodaran notes in his work on dividend policy, paying or not paying a dividend is a management decision, not a verdict on the company's underlying quality. You can find the full detail of my 10 criteria on any stock's page.

FAQ

What is dividend yield?

The dividend paid over one year, divided by the stock's current price. A 3% yield means you receive 3% of the price you paid each year, before tax, on top of any price appreciation.

Why can a flawless stock pay no dividend at all?

My quality score measures profitability, growth and financial discipline, not payout policy. A company can be excellent and still choose to reinvest everything into growth rather than pay a dividend.

Is a high yield always good news?

No. A high yield can simply signal a price that has fallen, or a payout ratio already close to its ceiling, as with Hong Kong Exchanges or Grupo Aeroportuario Centro Norte in this sample. Always check the payout ratio and the multi-year trend before drawing conclusions.

Are these dividend stocks eligible for a French PEA account?

Some are, subject to the company's exact registered office (the real PEA criterion, not just where it trades): Amadeus (Spain), ZEAL Network (Germany) and Technogym (Italy) in this ranking are domiciled in the European Union. Always verify exact eligibility before investing through this account type.

Related reading

• Which stocks create the most value with the least capital?
• Does a perfect quality score protect you from the market?
• Seven high-quality Canadian stocks, most of them pricey

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About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).