The following is a description of the methodology used to analyze securities.
Qualification
In order to qualify, the security must be publicly traded in the United States and make a regular payment to its holder that, on an annual basis, has increased in each of the most recent 25-years.
Initial Payment Calculation
In calculating the annual regular payment, no special payments are considered (like special dividends). In determining the payment with which to start the calculation, the following process is undertaken beginning with the consideration of the most recent payment and looking back not more than 25-years.
The payment is compared to the next most recent payment. If the intervals and values of the payments are the same, those payments are considered to be part of the same year provided the maximum number of payments in that year has not yet been reached. A year is completed when it comprises of a number of payments equal to the interval of those payments: in example, there are four in a year when the interval is quarterly but only one when it is annually. Once a year is completed, this process is repeated beginning with the consideration of the most recent payment following the completed year.
When there is no payment to consider for comparison, the initial payment is considered to have been found. The initial payment is the last payment added to the most recently completed year. In the event no year has been completed, the initial payment is earliest payment made. (As the initial payment may not be able to be calculated in this manner, the system allows for an administrator to manually pick the initial payment.)
Annual Regular Payment Calculation
Once the initial payment has been determined, the annual regular payments for each year is calculated as follows.
The value of a first payment is added to a number of the latest payments preceding the first; the number of payments summed together is equal to the interval of the first payment, and this aggregate value is the annual regular payment. In example, a total of four payments (including the first) would be aggregated when the interval of the first is quarterly but only one payment when its interval is annually.
The year of the annual regular payment is calculated as the average of the calendar years of the payments, rounding halves down. In example, quarterly payments having years 2020, 2020, 2021, and 2021 would be calculated as the year 2020.
Current Year Is Forward-Looking
In the event there are not enough payments remaining to fulfill the interval required by first payment in the current year, the missing payments are assumed to have the same value and year as the most recent payment of the aggregation. In other words, if not all of the payments in a year have not yet occurred, the annual regular payment of the year is calculated as forward-looking.
Current Yield
The current yield of a security is calculated as forward-looking, meaning the most recent payment is annualized as if it were paid in each increment of the year. By dividing the annualized payment into the regular market price, yield is calculated. In example, consider a security that paid $1.00 in the first two quarters and $1.25 in the third (and most recent) quarter. Only the most recent payment of $1.25 would be considered, meaning an annualized payment of $5 would be used to calculate yield. If that security was trading at a regular market price of $50, a yield of 10% would be presented.
Credit
Historial and market information is provided by: