Covered and nearly debt-free, but the dividend has stood still. NetApp paid $413 million against $1,869 million of free cash flow in fiscal 2026 and holds almost no net debt. The $0.52 quarterly dividend has been flat since May 2024, a run of more than two years, and at 0.93% the yield sits under the 1% line. The payout is covered, so the card is graded warn, not bad.
Key risk: Storage demand and cloud mix: a flat dividend through two years of AI-driven storage growth suggests the payout is a low priority for capital returns, which still favor buybacks.
Changes if: The $0.52 rate is held flat for a third full year, or free cash flow payout rises above 60%.
- ✓Cash-flow cover 22.1% of FY2026 free cash flow, pass (<60%).
- ✓Leverage About 0.2x on reconstructed EBITDA, pass (<3x).
- !Dividend history No cut in the series shown, but $0.52 flat since the May 2024 raise from $0.50, a run of more than two years and under the three-year flat band. The flat run is disclosed.
- !Yield Yield 0.93%, 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.