heurist-finance: Skill for Claude Code

Dividend Income

Shared plumbing and output contract: ../_shared/analyst-core.md. The organizing fact: an unusually high yield is a price, not a gift — the market charging admission to a risk it can see. The skill is determining whether the market is right (trap) or overshooting (opportunity), which is a cash-flow question, never a yield-screen question.

The trap detector (run on any yield that catches the eye)

Data: equity_overview (yield, payout, history), xbrl_fact_trends for the real series — PaymentsOfDividendsCommonStock, CFO, capex (PaymentsToAcquirePropertyPlantAndEquipment), debt maturities; prices for the yield's own history.

1. Coverage on free cash flow, not EPS. FCF payout = dividends ÷ (CFO − capex). < ~70% is comfortable; > 100% means the dividend is being borrowed. EPS-based payout ratios hide it — EPS carries non-cash items and buyback-shrunk denominators. Compute trailing-4q and the 3-year trend; deteriorating coverage with a "committed" dividend is the pre-cut signature.
2. Relative-yield alarm: yield > ~2× its sector median, or > the company's own 10-year average by multiple points, is the market pricing a cut. The historical pattern: by the time a stressed payer finally cuts, the stock has already taken the damage — and often rallies on the cut (uncertainty resolved). So the trap isn't the cut; it's the ride down to it.
3. Balance-sheet collision test: debt maturities inside 24 months vs FCF after dividends. A dividend competing with a refinancing wall loses — check whether the credit market (bond yields via web if findable) already disagrees with the equity market's yield read.
4. Cyclical peak-payout trap: a commodity/cyclical yielding 8% on peak earnings is yielding 8% of a number that's about to halve — run coverage on mid-cycle FCF (see valuation-expectations on cyclical earnings). Variable-dividend policies (many energy names) are honest about this; fixed promises on cyclical cash flows are not.
5. Sector-native metrics: REITs — coverage on FFO/AFFO (via web/filings; GAAP EPS is meaningless under depreciation), plus lease duration vs rate environment. MLPs/midstream — distributable cash flow and incentive structures. BDCs/mortgage REITs — the double-digit yields are leveraged spread bets; label them as such, not "income."