Covered, compounding reliability. A 2.5% yield on a 62.4% payout is covered income: $1.72 a quarter, raised in August 2026 for a 63rd consecutive year. The raise was 6.8%, from $1.61 to $1.72, and it came with a new $6 billion share-repurchase authorisation.
Key risk: Industrial and construction cycles — diversified manufacturing still tracks automotive, construction and general industrial demand, so a broad manufacturing downturn hits volumes across segments.
Changes if: Earnings fall enough to push the payout well past 62.4% on a sustained basis, or the 63-year increase streak is paused.
- ✓Payout-coverage check: 62.4% on a trailing basis — $6.88 indicated against trailing earnings. Covered, with over a third of earnings retained.
- ✓Yield check: 2.5% indicated — $1.72/qtr × 4 at the $275.75 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- ✓Dividend growth check: 63 consecutive years of increases; the latest raise, declared Aug. 7, 2026, lifted the quarterly dividend 6.8%, from $1.61 to $1.72.
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.