Covered, slow but unbroken compounding. A 3.0% yield on a 52.1% payout against FY2026 non-GAAP earnings is covered income: $0.72 a quarter, raised in June 2026 for the 49th consecutive year. The growth is slow — 1.4% on the last raise — but the streak is one year short of Dividend King status.
Key risk: Product recalls and portfolio change — the diabetes unit was spun out as MiniMed in 2026, and recall cycles have moved the share price even when the dividend itself was untouched.
Changes if: Reported earnings fall far enough that the payout stops being covered on a non-GAAP basis too, or recall and separation costs consume the $5.4 billion of FY2026 free cash flow behind the dividend.
- ✓Payout-coverage check: 52.1% on a non-GAAP basis — $2.88 indicated against $5.53 of FY2026 non-GAAP diluted EPS (reported FY2026 EPS was $3.73). Covered on the adjusted basis, thinner on the reported basis.
- ✓Yield check: 3.0% indicated — $0.72/qtr × 4 at the $95.41 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- ✓Dividend growth check: 49 consecutive years of increases; the latest raise, declared June 3, 2026, lifted the quarterly dividend 1.4%, from $0.71 to $0.72. Slow growth, uninterrupted.
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.