A broker's token dividend, just raised sharply — income it is not. Interactive Brokers paid $42 million of common dividends against $600 million of net income attributable to common stockholders in fiscal 2025, 7.0% on the sector-appropriate earnings base for a broker, whose operating cash flow carries client balances and is not a coverage base. The board raised the quarterly rate 71% to $0.15 on October 15, 2026, payable December 14, 2026; the $0.35 annualized rate still shown in vendor screens is stale. The trailing yield is 0.42%, under 1%, so the card is graded warn as a growth holding under §1.
Key risk: Earnings follow trading volumes, client balances and interest rates — a quiet market shrinks the income that was just used to raise the dividend.
Changes if: The trailing yield rises above 1%, or the dividend is cut.
- ✓Earnings payout 7.0% of FY2025 net income attributable to common stockholders, pass (<60%), on the sector-appropriate base.
- ✓Leverage basis Broker, not graded on net debt/EBITDA; graded on earnings payout and capital under the §3 sector note, as on the BNY card.
- ✓Growth record No cut in the record shown; quarterly rate raised to $0.15 in October 2026, up 71% from $0.0875.
- !Yield Trailing yield 0.42%, under 1% — warn as a growth holding under §1, not income.
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.