Mason To gauge the sustainability of a dividend, focus on the company's payout ratio, which is the percentage of earnings paid out as dividends. A ratio below 60% is generally considered safe, as it leaves room for the company to reinvest in growth and handle economic downturns. Also, look at the company's dividend history—consistent or increasing payouts over many years are a good sign. Financial stability, strong cash flow, and a solid balance sheet are other key indicators. Avoid companies with excessive debt or declining revenues, as these are more likely to cut dividends.