Simply Safe Dividends Review
Ease of Use
Have you heard of the dividend portfolio management service, Simply Safe Dividends? This service claims to offer help in optimizing your dividend income. With some interesting tools and features, could Dividend be what you’re looking for? Before you buy, make sure to read our thorough review of Simply Safe Dividends and find out if they are the right fit for you.
About Simply Safe Dividends
Simply Safe Dividends.com (SSD) is a dividend portfolio management service for investors looking to optimize dividend income. Aptly named, the site provides education, analysis, and strategies on generating dividend income safely. Dividends have made up 40-percent of total returns for U.S. and European stocks since the 1970s, according to SSD. The service was designed to provide a concise overview of your dividend stocks and ways to capitalize on opportunities to grow long-term income while minimizing risk. While this seems relatively simple on the surface, the reality is that stocks with the highest dividends tend to be extremely risky. Newbies find out the hard way just how risky when these companies go bankrupt or abruptly cut their dividend. SSD tries to help investors avert those two painful outcomes through a diversified portfolio strategy on a single one-stop platform currently serving over 2,000 retirees.
History of Simply Dividends
Simply Safe Dividends was launched in 2015 by Brian Bollinger, a licensed CPA and former partner at a Chicago-based investment firm. Dividend portfolios gained a lot of interest (no pun intended) through the zero-interest-rate-policy (ZIRP) era after the housing bubble. Low-interest rates hurt retirees as they searched for ways to optimize income through dividends. Bollinger spotted this niche and focused on evolving the science of dividend portfolios. He created dividend portfolios that have outperformed the S&P 500, generating a 12-to-14-percent return versus 11-percent. He compared buying stocks to buying a house, and the goal is capital appreciation but also income generation. Bollinger sums up the service as a “one-stop-shop for responsible income investing.”
Pitfalls of Dividend Investing
While dividend investing may seem like a sophomoric way to grow a portfolio, the reality is they can be very risky for amateurs who don’t research the underlying companies in advance. For example, an earnings miss could drop XYZ’s stock value by 25-percent, which spikes up the annual dividend yield to 11-percent. An uninformed investor may be enthralled by the double-digit yield and jump headfirst into the stock looking to capture the rising yield, only to have the stock plummet another 20-percent accompanied by news that they will be cutting the dividend payouts. Tools like Simply Safe Dividends and Dividend.com make investors aware of these risks, allowing them to navigate around the pitfalls with diversification. Let’s take a closer look.
How it Works
Like most mainstream fintech apps, SSD aims to make engagement as simple and frictionless as possible. Users provide financial information and list their dividend stocks as SSD consolidates and analyzes the data to generate a simplified bird’s eye view through the dashboard.
I can’t stress how convenient some of the tools are. Instead of having to look up the dividend payouts for each stock in a brokerage account and manually keeping track in a notebook or Excel, SSD provides a super convenient Income Calendar that tracks and displays upcoming dividend payments so users can plan their budgets accordingly for the income. This is a boon for budgeting, especially for retirees on a fixed income.
Dividend Safety Score
The Portfolio holdings provide a nice view of the underlying company metrics in your dividend portfolio. SSD analyzes the underlying companies to determine the risk of a dividend cut and derives a Dividend Safety Score. Safer dividends generate a higher score and likely have lower dividend yields.
However, the more useful facet are the Dividend Safety Scores of the riskier companies. These are the types of stocks that carry a high-yield but have the risk of dividend cuts or, even worse, bankruptcy. I like to keep a close eye on these income producers and pay attention to any alerts generated by SSD. Any change in a holding’s dividend (raise or cut) will trigger an email alert notifying the change amount and how it affects your income stream.
The Intelligent Income monthly newsletter is written by the founder, Brian Bollinger. It’s a solid start for newbies to help get familiarized with the science of dividend portfolios. The newsletter is well written and easy to follow as Mr. Bollinger has a knack for simplifying concepts. It also includes and tracks three model dividend portfolios, which he personally manages with his own money so that readers can follow, gather ideas, or even copy (at their own risk). The three portfolios are diversified towards their objectives and aptly titled: Conservative Retirees, Long-term Dividend Growth, and Top 20 Dividend Stocks. Each portfolio provides performance, objectives, holdings, recent changes, and commentary. Updated information is posted daily on the website for members.
Members can also get more investment ideas through the customized research that SSD has performed on over 100 dividend-paying stocks. The analysis includes underlying business model descriptions, dividend growth profile, dividend safety, earnings payout ratio, and earnings history. SSD also created a timeliness metric that compares the five-year history dividend yield range and where it falls in that range. I like how the data is purely centered around all things related to the dividend, so there is no digging or filtering involved to get to that information. Just give me the factors that may materially impact the dividend, no pitch, no muss, and no fuss.
For investors that know what they want, they can use the Dividend Screener. Users can input their preferences, including sector, dividend yield ranges, dividend safety score, and annual dividend increase streak ranges. It’s amazing how many different stocks that I wasn’t even aware of pop up on this screen. It is critical to do deeper research on the less known companies, but SSD provides the tools for this task.
Simply Safe Dividends Pricing and Fees
SSD provides a 14-day free trial. The annual membership fee is $399. Membership includes unlimited portfolios, alerts, full access to all research notes, and the screening tool. Members can also connect SSD to participating online brokerage account to auto-sync holdings. There is a 60-day money-back guarantee.
Who is Simply Safe Dividends Best Suited For?
The ideal users are retirees, passive long-term investors, and even Millennials. Long-term and income being the key terms here. Managing a dividend portfolio is much trickier than it appears on the surface. The trickles of income certainly add up as mentioned earlier; 40-percent of stock market gains since the 1970s is composed of dividends. Income generation through dividend investment is a solid strategy that takes the right tools to optimize. If you have a shorter-term investment horizon and you are looking for growth stocks, you may be more inclined to use a service like Motley Fool Stock Advisor.
- Super convenient one-stop platform for managing dividend portfolios
- Income Calendar shows when to expect income from dividend payouts
- Dividend Safety Score is a great metric to balance the portfolio risk
- Plenty of ideas provided through in-house research and newsletter
- Three model portfolios are managed by the founder himself that users can follow
- Screener tool finds some uncanny less-known dividend stocks under the radar
- Easy-to-use and follow for newbies to seasoned self-directed investors
- Dividend investing can be too narrow-focused especially if underlying stock tanks
- $399 upfront annual membership is expensive