Covered, with leverage that reads differently on two bases. Nasdaq paid $601 million against $1,989 million of free cash flow in fiscal 2025 and has raised the split-adjusted dividend every year. Leverage is about 2.3 times adjusted EBITDA but about 3.3 times on a GAAP basis, so the leverage check is flagged and both bases are stated. The yield clears the 1% line; the flagged check makes the card warn.
Key risk: Deal and trading volumes drive Nasdaq's revenue: a quiet listings market cuts the cash flow behind the dividend and the deleveraging story.
Changes if: Leverage crosses 4x on the GAAP basis, or free cash flow payout rises above 60%.
- ✓Cash-flow cover 30.2% of FY2025 free cash flow, pass (<60%).
- !Leverage About 2.3x on adjusted EBITDA but about 3.3x on FY2025 GAAP operating income plus depreciation; the GAAP-basis figure sits in the review band, so the check is flagged and both bases are stated on the card.
- ✓Dividend history Split-adjusted quarterly rate raised every year: $0.24 in 2024, $0.27 in 2025, $0.31 in 2026. No cut in the series shown.
- ✓Yield Yield 1.17%, clears the 1% line; no trap pattern.
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.