The dividend is small against cash flow, but leverage sits in the fail band and the rate has been flat for years. Global Payments pays $0.25 a quarter, $1.00 annualized, unchanged since the rate stepped up in 2021. Dividends of $260 million are 14% of 2025 free cash flow of $1,892 million, a pass. Two cautions grade it warn: net debt of $19,195 million is 7.8x EBITDA of $2,458 million, in the fail band, which never fails alone but grades warn while coverage passes; and the quarterly rate has been flat at $0.25 for more than three years.
Key risk: Leverage built by acquisition leaves little room: a payments-volume downturn or a goodwill impairment (2024 earnings were $0.41 a share after charges) tightens the balance sheet first.
Changes if: Net debt/EBITDA falls below 3x and the rate rises, or free-cash-flow payout crosses 60%.
- ✓Cash-flow cover 13.7% of FY2025 free cash flow, pass (<60%).
- !Leverage 7.8x net debt/EBITDA, fail band (>4x) — a caution, not a fail, while coverage passes.
- !Dividend history Rate flat at $0.25 since 2021; flat 3+ years is the caution band. No cut.
- ✓Trap screen Yield 1.20%, payout under 100%, no cut; 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.