Covered — at a fuller trailing payout. A 2.82% yield on an 83.06% trailing payout is covered, but fuller than most House cards: $0.38 a quarter, raised $0.01 in December 2025, extending 7 years of increases. Forward estimates put the payout near 46.9%, so coverage looks healthier on next year's earnings than on trailing ones — the card leans on the recovery, not the past year.
Key risk: Restaurant-demand concentration — frozen potato sales track restaurant traffic, and McDonald's alone is about 15% of sales, so a foodservice downturn hits earnings directly.
Changes if: Next-year earnings land near the $3.24 estimate, pulling the payout toward 46.9% — or trailing earnings stay depressed and the payout stays above 80%.
- !Payout-coverage check: 83.06% trailing payout ratio — covered, but fuller than a low-payout payer; about 46.9% on next-year earnings estimates, so coverage depends on the recovery.
- ✓Yield check: 2.82% indicated — $0.38/qtr × 4 at the $53.83 close on Oct. 23, 2026. Real, earned yield, not a special or a return of capital.
- ✓Dividend growth check: 7 years of increases; the latest raise lifted the quarterly dividend by $0.01 in December 2025.
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.