Covered, compounding. A 1.59% yield on a 31.36% trailing payout is covered with room to spare: $0.50 a quarter, raised from $0.40 in January 2025, extending 12 years of increases. Cloud and database revenue keeps growing — up 21.6% year over year in the latest quarter — and the payout leaves most earnings retained, so the dividend has headroom even as the share price has fallen hard from its high.
Key risk: AI data-center spending and debt — Oracle's cloud buildout is capital-hungry, so heavy capex and a large debt load compete with the dividend for cash if cloud growth slows.
Changes if: The trailing payout pushes past 50%, or free cash flow after data-center capex no longer covers the $2.00 annual rate. Either would put the compounding record under pressure.
- ✓Payout-coverage check: 31.36% trailing payout ratio — covered, with more than two-thirds of earnings retained.
- ✓Yield check: 1.59% indicated — $0.50/qtr × 4 at the $126.16 close on Oct. 23, 2026. Real, earned yield, not a special or a return of capital.
- ✓Dividend growth check: 12 years of increases; the latest raise lifted the quarterly dividend from $0.40 to $0.50 in January 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.