Sustainability of dividends

For dividend investors, we all wanted the above. How do you determine if dividends are sustainable beyond simple numbers like FCF, and NP above distribution? 

I like to share mine, and hope readers generously share theirs. I am

Talking about absolute sum of distribution not yield as yield is a function of price. Distribution amount can be the same or even increasing but yield falling due to runaway prices.

Determine "will" to give:

1) Track records and whether owners owned a significant stake (>35%)

2) Case of even in a bad year, dividends is maintained. While some might consider as imprudent, I see it as a good will gesture. Examples include Venture and CMPH 

2) Level of buffer of FCF

Dun just take FCF as OCF - Capex. Take tax away too, there are some reports that add back finance costs in OCF. Take that away too. 

3) Growth drivers.

It's easier for reits in this area. CCT has capital green, MIT has BTS project. 

But growth drivers can evaporate into thin air. APPT Taichung, CMPH jiurui are examples. APPT not only has Taichung, it has broadband and cross selling as growth drivers. So similar to Starhub. If one doesn't work out, still has the other 2. Well... 

Organic growth are even harder to determine unless you are a insider. Look how sexy aviation turn into MRO within 6 months. 

4) Management execution history

This is the easy part. Read AR for the last 5-10 years. What are their plans for expansion and growth? Did they pan out as planned? If not, why? ST engineering has quite a good record if not flawless record. I bought ascendas REIT for this reason too, I find the pattern of placement, sale of property for a newer property that is yield accretive very attractive.

5) Do stress tests and see if the company can continue their dividends. It is not rocket science and assumptions are rubbish in, rubbish out, but it does give u a sense. I did stress test for CMPH and CapitalComercical Trust before. If intersted, can refer to past posts.

6) Buy when industry is not doing well rather than when industry is doing well.

If give you the true earnings and if company can do well/ ok in a downcycle what are the chances in can't do well in a upcycle. But no one can predict the bottom. I thought I bought Sembcorp and Lee metals at a low. But low get lower. But maybe you shall not try to get something at a high? Perhaps high can get higher? Oops I am confused. 

I am done. What is in your bag?