Covered on trailing earnings — but the yield is elevated for a reason. A 4.10% yield on a 55.47% trailing payout is covered on trailing earnings, but the yield is high because the price has fallen, not because the payout jumped: $0.63 a quarter, raised in December 2025 by 1.6%, from $0.62, for a 17th consecutive year of increases and a 94th consecutive year of paying. Reported earnings have been volatile on acquisition-related charges, so the trailing payout flatters or understates coverage quarter to quarter — free cash flow, not the trailing ratio alone, has to carry this rate.
Key risk: Patent-cliff and pipeline risk — key products face loss of exclusivity, and the dividend’s future depends on new medicines replacing that revenue rather than on the streak alone.
Changes if: Free cash flow falls short of the $2.52 indicated dividend, or the board breaks the 17-year raise streak. Cash coverage, not the trailing payout, is the tripwire.
- !Payout-coverage check: 55.47% trailing — the $2.52 indicated dividend is covered on trailing earnings, but reported earnings are volatile, so this ratio moves with charges rather than with cash alone.
- ✓Yield check: 4.10% indicated — $0.63/qtr × 4 at the $61.48 close on Oct. 23, 2026. Real cash dividend, paid Nov. 2, 2026, to holders of record Oct. 2, 2026.
- ✓Dividend growth check: 17 consecutive years of increases; the latest raise, declared Dec. 2025, lifted the quarterly dividend 1.6%, from $0.62 to $0.63.
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.