Covered, well-covered reliability. A 1.8% yield on a 38.8% payout is comfortably covered income: $1.59 a quarter, raised in 2026 for a 35th consecutive year of increases. The raise was 6.0%, from $1.50 to $1.59, and well over half of earnings stay in the business.
Key risk: Defence and shipbuilding execution — revenue depends on government contracts and long shipbuilding programmes, where cost overruns or programme delays can compress margins even while the order book stays large.
Changes if: Contract margins compress enough to push the payout well past 38.8%, or a major programme delay cuts the cash flow behind the dividend.
- ✓Payout-coverage check: 38.8% on a trailing basis — $6.36 indicated against trailing earnings. Covered, with well over half of earnings retained.
- ✓Yield check: 1.8% indicated — $1.59/qtr × 4 at the $349.36 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- ✓Dividend growth check: 35 consecutive years of increases; the latest raise lifted the quarterly dividend 6.0%, from $1.50 to $1.59. Steady growth, uninterrupted.
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.