Covered, fourteen straight raises — and levered into the review band. Quest paid $314 million of dividends from $864 million of free cash flow in fiscal 2025, 36.3%, a pass, and the quarterly rate rose 7.5% to $0.86 in February 2026, the fourteenth straight year of increases. The caution is leverage: net debt of $6,270 million is 3.7x EBITDA of $1,701 million, in the review band. The 1.35% trailing yield clears the sub-1% line, so the card is graded warn on leverage alone.
Key risk: Acquisition debt at 3.7x EBITDA means the dividend competes with integration risk — a deal that underperforms tightens both the ratio and the raise record.
Changes if: Net debt/EBITDA falls below 3x, or the free-cash-flow payout crosses 60%.
- ✓Cash-flow cover 36.3% of FY2025 free cash flow, pass (<60%).
- !Leverage 3.7x, review band (3–4x) — a caution; acquisitions are the stated use of the debt.
- ✓Growth record Fourteen straight years of increases; no cut in 10 years.
- ✓Trap screen Yield 1.35%, no cut, payout under 100%; not a trap pattern.
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.