Covered, low payout — cyclical, not core. A 1.22% yield on a 17.1% trailing payout is comfortably covered: $0.45 a quarter, raised from $0.40 in November 2025, with 11 years of growth. Fiscal Q3 2026 net income of $904.9 million was down 12% year over year on $3.20 of diluted EPS, so the dividend is safe on payout but the earnings behind it move with the housing cycle — hence a research weight, not a core one.
Key risk: Housing-cycle exposure — mortgage rates, affordability, and land and construction costs drive closings and margins, so a housing downturn hits earnings long before it touches the dividend rate.
Changes if: Closings or orders fall for two consecutive quarters, or the trailing payout pushes past 40%. Either one moves this from a research holding to a watch item.
- ✓Payout-coverage check: 17.1% trailing payout — $1.80 indicated against trailing earnings. Well covered, with most earnings retained.
- !Yield check: 1.22% indicated — $0.45/qtr × 4 at the $147.48 close on Oct. 23, 2026. Real, earned cash dividend, but low income for a single stock.
- ✓Dividend growth check: 11 years of growth; the latest step, $0.40 to $0.45, was paid in November 2025, and the Jul. 21, 2026 declaration held $0.45.
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.