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 Integrys (NYSE: TEG) 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 forward 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.

Integrys yields a whopping 5.3% -- much higher than the S&P 500’s 1.7%.

2. Payout ratio
The payout ratio might be the most important metric for judging dividend sustainability. It compares the amount of money a company paid out in dividends last year to the earnings it generated. 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, even when its dividend yield doesn’t seem particularly high.

Integrys’ payout ratio is a moderate 64%. On a free cash flow basis, that figure drops to 41%.

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 five is a warning sign. Meanwhile, the debt-to-equity ratio is a good measure of a company's total debt burden.

Let's examine how Integrys stacks up next to its peers:

Company

5-Year Annual Earnings-Per-Share Growth

5-Year Annual Dividend Growth

Integrys

78%

4 times

Spectra Energy (NYSE: SE)

123%

3 times

Sempra Energy (NYSE: SRE)

104%

3 times

Xcel Energy (NYSE: XEL)

119%

3 times

Source: Capital IQ, a division of Standard & Poor's.

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.

Over the past five years, Integrys' earnings per share grew by 1% annually, while its dividend grew at a 4% rate.

The Foolish bottom line
Integrys exhibits a fairly reasonable dividend bill of health. It has a high yield, modest-to-moderate payout ratio, and low leverage for a utility. Dividend investors will want to ensure that the company’s earnings remain stable, given the industry’s characteristically high amount of leverage.

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Ilan Moscovitz doesn’t own shares of any companies mentioned. You can follow him on Twitter @TMFDada. Motley Fool newsletter services have recommended buying shares of Spectra Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.