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I have been building a system to help me with my dividend investing and learning to find good opportunities.
The approach that I am taking currently is to surface dividend plays with three layers of signal: (1) a daily data pipeline that keeps prices, payouts, and fundamentals fresh while filtering out stale or low-quality tickers; (2) a long-term quality/value score that rewards long dividend streaks, sustainable payout ratios, yield vs. history, fair-value gaps, and Chowder-style bonuses, then tiers symbols by conviction; and (3) a short-term “dividend event” engine that scans the next two weeks of ex-dates, runs historical capture stats plus momentum/volatility checks, and recommends entry/exit windows with scenario-tested returns.
In addition to the overall opportunity score, there is a general ’Tier’ system where stocks get assigned a tier of 1-4 with 1 being the best.
Tiers come directly from the long-term opportunity scoring
1. **Quality Score (0–90)** sums dividend streak, 5‑year dividend CAGR, payout ratio, and FCF coverage points.
2. **Value Score (0–80)** adds yield vs. history, current P/E plus historical percentile, 52-week drawdown, and modeled undervaluation bonuses.
3. **Opportunity Rank** = quality + value + bonuses (e.g., Chowder number, deep undervaluation, sustainable FCF). To keep scores realistic, high ranks are clamped if quality is low.
* **Tier assignment** uses both quality and rank:
* Tier 1: quality ≥70 AND rank ≥80
* Tier 2: quality ≥50 AND rank ≥65
* Tier 3: any quality with rank ≥30–50 range
* Tier 4: anything below those cutoffs
So tiers are just the final labeling of that dual-score system, ensuring only fundamentally solid, attractively priced stocks appear in the upper tiers.
I’m hoping to get some feedback on this approach and if anyone has any thoughts on other things that it would be useful to look at for finding good opportunities?
Any advice would be greatly appreciated.