Covered on full-year earnings — thin on trailing earnings. A 4.25% yield on a 59.5% payout against FY2025 earnings is covered, but only just: $0.33 a quarter, raised in December 2025 for a 45th consecutive year of increases. Trailing GAAP earnings ran lower than the FY2025 figure, so the same $1.32 annual rate reads near 90% of trailing earnings — the cushion here is thinner than the headline payout suggests.
Key risk: Fee pressure in active management — earnings fell to $2.22 per share in FY2025 from $2.39 the year before, and the dividend now takes 59.5% of that lower base. Another down year in earnings leaves little room before the payout reaches earnings.
Changes if: Earnings fall again or the trailing GAAP payout stays near 90% — the full-year basis is the only one on which this dividend is comfortably covered. A flat or falling EPS trend would change that read.
- !Payout-coverage check: 59.5% of FY2025 EPS of $2.22 — covered on that basis, but the $1.32 annual rate is close to 90% of lower trailing GAAP earnings, so the cushion depends on which earnings year is used.
- ✓Yield check: 4.25% indicated — $0.33/qtr × 4 at the $31.06 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- ✓Dividend growth check: 45 consecutive years of increases; the latest raise, declared in December 2025, lifted the quarterly dividend 3.1%, from $0.32 to $0.33. Slow growth, uninterrupted.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.