Covered, lightly levered, and paying 3.6%. HP paid $1,037 million of dividends from $2,674 million of free cash flow in fiscal 2025, 38.8%, a pass, and net debt of $7,843 million is 1.8x EBITDA of $4,306 million, a pass. The quarterly rate has risen in the record shown, to $0.30 in fiscal 2026, and declared dividends per share rose from $0.70 in fiscal 2022 to $1.16 in fiscal 2025. The 3.64% trailing yield is the highest in this batch outside the asset manager, with no trap pattern, and every check passes, so the card is graded good.
Key risk: PC and print demand is cyclical and price-competitive — the payout is comfortable today, but the cash flow behind it moves with hardware cycles.
Changes if: The free-cash-flow payout crosses 60%, or the dividend is cut.
- ✓Cash-flow cover 38.8% of FY2025 free cash flow, pass (<60%).
- ✓Leverage 1.8x, pass (<3x).
- ✓Growth record Declared dividends per share rose every year in the record shown, $0.70 to $1.16; no cut in 10 years.
- ✓Trap screen Yield 3.64%, no cut, payout under 100%; not a trap pattern — the yield is earned, not a falling price.
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.