Covered by cash flow, raised for 42 straight years. The $0.2310 quarterly dividend is 3.24% trailing at the October 27, 2026 close, and fiscal 2026 dividends paid of $427 million were 47.8% of the company's own $893 million free cash flow. Net debt of $2,194 million at April 30, 2026 is about 2.0× estimated EBITDA, inside the pass band on either an operating-income or EBITDA base. The dividend has been raised for 42 consecutive years with no cut in 10 years, and the §8 trap review finds no trigger: yield under 8%, payout under 100%, no cut.
Key risk: Sales and operating income fell in fiscal 2026 and the CEO announced retirement in July 2026, so coverage depends on a shrinking spirits market and a successor not yet named.
Changes if: Free-cash-flow payout rises past 60%, leverage passes 3×, or the raise streak breaks.
- ✓Payout on free cash flow 47.8% of FY2026 free cash flow; pass band <60%.
- ✓Leverage Net debt $2,194m; ~2.2× even on operating income alone (~$1.0bn), ~2.0× on estimated EBITDA; pass band <3×.
- ✓Dividend history Raised for 42 consecutive years; paid quarterly for 82 years; no cut in 10 years.
- ✓Trap review (§8) Yield 3.24% (<8%), payout <100%, no cut/suspension in 3 years; price decline noted but dividend grew and FCF covers it.
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.