Covered, compounding — steady restaurants, fuller payout. A 3.05% yield on a $1.62 quarterly dividend, raised 8% in June 2026 from $1.50, is covered: the $6.48 annual rate is about 60.9% of fiscal 2026 adjusted diluted EPS of $10.64, on sales over $13 billion. Fiscal 2026 returned $1.44 billion to shareholders through dividends and buybacks, so the payout rests on restaurant cash flow, not borrowing.
Key risk: Consumer spending and food costs — beef and commodity inflation already ran near 4–5% in fiscal 2026, and a diner slowdown hits same-restaurant sales first.
Changes if: The payout pushes well past 60.9% of adjusted EPS, or same-restaurant sales stall while commodity inflation stays elevated. Earnings coverage is the tripwire here.
- ✓Payout-coverage check: 60.9% of fiscal 2026 adjusted diluted EPS of $10.64 — the $6.48 annual dividend — with $693 million of fiscal 2026 dividends inside $1.44 billion returned to shareholders.
- ✓Yield check: 3.05% indicated — $1.62/qtr × 4 at the $212.40 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- ✓Dividend growth check: Raised 8% in June 2026, from $1.50 to $1.62 a quarter, after fiscal 2026 sales passed $13 billion for the first time.
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.