Covered, debt-free, and raised every year, priced as growth. Monolithic Power paid $300 million against $666 million of free cash flow in fiscal 2025, holds $1.1 billion of cash with no long-term debt, and has raised the quarterly rate every year to $2.00. At the new rate the payout is about 58% of fiscal 2025 free cash flow, still inside the pass band. At 0.66% the yield is under the 1% line, so the card is graded warn.
Key risk: Semiconductor cycles: the payout is 58% of fiscal 2025 free cash flow at the new $2.00 rate, so a second down year leaves little room before the balance sheet funds the dividend.
Changes if: Free cash flow payout rises above 80% on a trailing basis, or the $2.00 rate is cut.
- ✓Cash-flow cover 45.0% of FY2025 free cash flow, pass (<60%); about 58% at the $2.00 rate, still inside the pass band.
- ✓Leverage Net cash $1,099m, no long-term debt, pass.
- ✓Growth record Quarterly rate $0.50 in 2020 to $2.00 in 2026, raised every year; dividends paid rose every year, $90m to $300m, 2020 to 2025. No cut.
- !Yield Yield 0.66%, under the 1% line: a growth holding, 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.