Dividend investing is a tried-and-true strategy for generating strong, steady returns in economies both good and bad. But as Corporate America's slew of dividend cuts and suspensions over the past few years has demonstrated, it's not enough simply to buy a high yield. You also need to make sure those payouts are sustainable.

Let's examine how SYSCO (NYSE: SYY) stacks up in four critical areas to determine whether it's a dividend dynamo or a disaster in the making.

1. Yield
First and foremost, dividend investors like a large yield. But if a yield gets too high, it may reflect investors' doubts about the payout's sustainability. If investors had confidence in the stock, they'd be buying it, driving up the share price and shrinking the yield.

SYSCO yields 3.3% -- moderate and certainly not cause for alarm.

2. Payout ratio
The payout ratio might be the most important metric for judging dividend sustainability. It compares the amount of money a company pays out in dividends to the amount it generates. A ratio that's too high -- say, greater than 80% of earnings -- indicates that the company may be stretching to make payouts it can't afford.

SYSCO's payout ratio is 50%; given its dominance of the food distribution business, that appears even a bit conservative.

3. Balance sheet
The best dividend payers have the financial fortitude to fund growth and respond to whatever the economy and competitors throw at them. The interest coverage ratio indicates whether a company is having trouble meeting its interest payments -- any ratio less than 5 is a warning sign. Meanwhile, the debt-to-equity ratio is a good measure of a company's total debt burden.

With an interest coverage ratio of 15 times and a debt-to-equity ratio of 61%, SYSCO's debt burden appears quite manageable.

4. Growth
A large dividend is nice; a large growing dividend is even better. To support a growing dividend, we also want to see earnings growth.

SYSCO is so dominant in the food distribution business that it has no domestic competitors of considerable size. But let's examine how SYSCO stacks up next to the wider food retail industry:

Company

5-Year Earnings-Per-Share Growth

5-Year Dividend-Per-Share Growth

SYSCO

4%

12%

SUPERVALU (NYSE: SVU)

1%

(3%)

Kroger (NYSE: KR)

N/M*

12%**

Costco (Nasdaq: COST)

4%

12%

Median Food Retail

4%

12%

Source: Capital IQ, a division of Standard & Poor's. Averages are the median of medium- and large-cap U.S. industry components. *Not meaningful due to huge goodwill impairment charge. **3-year average growth.

The Foolish bottom line
SYSCO exhibits a clean dividend bill of health; its moderate yield appears sustainable at current or perhaps even increased levels.

Ilan Moscovitz doesn't own shares of any company mentioned. Costco and SYSCO are Motley Fool Inside Value recommendations. Costco is a Stock Advisor selection. SYSCO is an Income Investor recommendation. The Fool owns shares of Costco and SYSCO. The Motley Fool has a disclosure policy.