A fast-growing dividend from a leveraged hardware maker — the payout is covered, the yield is still half a percent. The $0.63 quarterly dividend ($2.52 annualized) is 17.0% of fiscal 2026 free cash flow. Dell initiated the dividend in 2022 and has raised it every year since, up 20% in February 2026, with $0.63 declared September 1, 2026, payable October 30, 2026. Leverage of 2.8× net debt to EBITDA is inside the §3 pass band, near the caution line, measured on total debt including financial-services debt. No cut in the series. The 0.51% yield is under 1%, which grades the card warn under §1.
Key risk: Leverage near the caution band and a cyclical PC and server market — earnings and free cash flow can fall faster than the dividend.
Changes if: The yield rises above 1% through raises, or leverage falls clearly below 2×.
- ✓FCF payout (§3) 17.0% of FY2026 free cash flow — inside the 60% pass band.
- ✓Dividend history (§3) Initiated 2022, raised every year since; +20% in February 2026; no cut.
- ✓Leverage (§3) 2.8× net debt to EBITDA — inside the 3× pass line, near caution; total debt including financial-services debt.
- !Yield (§1) 0.51% — under 1%, graded warn as a growth holding.
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.