Covered, steady — rate reset by the Freight spin-off. A 1.63% yield on a 28.8% trailing payout is comfortably covered: $1.22 a quarter, declared Aug. 21, 2026 and paid Oct. 1, 2026. The quarterly rate stepped down from $1.45 in June 2026 as a spin-off adjustment when FedEx Freight separated — holders received Freight shares alongside the lower rate, so the step-down is not a dividend cut.
Key risk: Freight demand cycles — global parcel and freight volumes, fuel costs, and the post-spin network restructuring drive earnings; a demand downturn hits the payout cushion before it hits the dividend.
Changes if: The trailing payout climbs past 50%, or the new $1.22 rate is frozen for more than a year. The spin-off adjustment is a one-time reset, not a reason to expect further step-downs.
- ✓Payout-coverage check: 28.8% of trailing earnings — $4.88 a year against earnings that cover it more than three times over. Comfortably covered.
- ✓Yield check: 1.63% indicated — $1.22/qtr × 4 at the $298.72 close on Oct. 23, 2026. Real, earned yield, not a special or a return of capital.
- !Dividend growth check: The quarterly rate moved from $1.45 to $1.22 in June 2026 as a spin-off adjustment for FedEx Freight, not a cut — holders received Freight shares. Year-on-year comparisons should use the $4.88 annualized post-spin rate.
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.