If I could only keep one dividend screen for the rest of my life, it would be high dividend yield with a low payout ratio. Everything else is commentary.
Yield tells you what you get paid. Payout ratio tells you whether you'll keep getting paid. A 5% yield at 110% of earnings isn't a dividend, it's a liquidation with good PR. But a 5% yield at a 40% payout ratio? That's a company sharing profits it can clearly afford, with room to grow the payout for years. Same 5%. Different universe.
Run it in a proper dividend stock screener, not a sorted column in a spreadsheet. A real dividend yield screener lets you set the yield floor and the payout ceiling at the same time and kills the traps before you can fall in love with them. Those 11% yielders at the top of naive lists almost always have stretched or negative payout ratios. The filter drops them before you see them. Think of it as an emotional guardrail disguised as a financial ratio.
Two refinements from experience. First, for capital-heavy businesses, use free cash flow payout instead of earnings payout, because accounting earnings can mislead. Second, compare the dividend payout ratio by company within its sector. Utilities can safely run higher ratios than tech because their cash flows are steadier. Context changes everything.
Then do the simple final step. Run a dividend calculator on each candidate: shares times payout, annual income, done. The safe high dividend stocks will show income you can believe. The traps will show income that was never real.
I keep coming back to this screen because it's the one that would have saved me the most money if I'd learned it first. It's not exciting. It just works.
DividendDB was built around exactly this: yield, payout ratio, and history on 197 US payers, filterable in seconds. Start at dividenddb.fyi.