A fast-raising dividend through a 10-for-1 split — covered, and still under 1%. The $0.23 quarterly dividend ($0.92 annualized, post-split) is 28.1% of fiscal 2026 free cash flow. KLA has raised the dividend every year; the board approved a 21% increase to $2.30 a quarter pre-split in May 2026, equal to $0.23 after the 10-for-1 forward split effective June 12, 2026, paid September 1, 2026. No cut in the series. Leverage is light at about 0.7× on a conservative basis. The 0.58% yield is under 1%, which grades the card warn under §1.
Key risk: Semiconductor equipment is cyclical — a chipmaker capex downturn hits revenue and earnings directly.
Changes if: The yield rises above 1% through raises.
- ✓FCF payout (§3) 28.1% of FY2026 free cash flow — inside the 60% pass band.
- ✓Dividend history (§3) Raises every year; +21% approved May 2026 (pre-split $2.30 = $0.23 post-split); no cut.
- ✓Leverage (§3) About 0.7× on a conservative basis (interest not separately tagged in the XBRL pull, so true EBITDA — and the ratio — is lower).
- !Yield (§1) 0.58% — under 1%, graded warn as a growth holding.
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.