Methodology

Human Strategy, AI-Assisted Execution

AI is our tool, not our portfolio manager. We define the rules, thresholds, and quality criteria. AI processes data at scale, but every stock that appears in our quadrants has passed a strict, human-designed fundamental filter:

• Dividend track record: minimum 10 years of consistent and growing payments
• Sustainable payout: controlled payoutPayout Ratio
  Dividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall. ratio to ensure margin of safety
• Financial strength: reasonable debtNet Debt
  Debt minus cash on hand. It’s the debt that would remain if the company used cash to pay down borrowings. levels, healthy margins, and competitive ROEROE (Return on Equity)
  A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
• Reasonable valuation: P/EP/E (Price-to-Earnings)
  Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates., P/BP/B (Price-to-Book)
  Compares the stock price to the company’s accounting net worth (book value). Useful for some sectors, less for others., and other ratios within demanding ranges
• Competitive advantage: presence of a moat, barriers to entry, or dominant market position
• Earnings growth: positive long-term trend in earningsEarnings (Profit)
  What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss.

A company that fails these fundamental requirements does not pass the filter, regardless of what the AI suggests.

AI-Enhanced Fundamental Analysis

Where AI adds value is in scale and depth. We simultaneously analyze:

• Over 50 fundamental metrics per company
• 10+ years of dividend and earningsEarnings (Profit)
  What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. historical data
• Real-time company news and macroeconomic developments
• Sector and competitive context
• Distinguishing temporary problems from permanent ones

From Metrics to Quadrants

These fundamental filters generate two proprietary scores:

• Quality (Y-axis): evaluates balance sheet strength, dividend consistency, payoutPayout Ratio
  Dividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall. sustainability, competitive moat, and earningsEarnings (Profit)
  What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. growth
• Opportunity (X-axis): evaluates current valuation relative to historical averages and relative yieldDividend Yield
  The Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.

The combination of both scores places each stock in one of four quadrants: OPTIMAL, WATCH, CAUTION, or AVOID.

Engineered Prompts

The prompts guiding our AI are designed with conservative investment criteria:

• Long-term dividend growth investing (DGI) philosophy
• Evaluate business quality (moat, competitive advantage, management)
• Detect hidden risks in the balance sheet
• Prioritize dividend safety over maximum yield

Continuous Improvement

As AI models evolve, our analysis improves:

• Each iteration recognizes more subtle patterns in data
• Better understanding of sector and macroeconomic context
• Deeper dividend sustainability analysis