Covered, compounding — plus specials that vary. A 1.31% yield on a roughly 31% regular payout is covered with room to spare: $0.35 a quarter, raised from $0.33 in February 2026, from the Kenworth, Peterbilt, and DAF truck maker. The regular dividend is the card; the December specials — $1.40 in December 2025, $3.00 the year before — are a bonus that varies with the truck cycle and is not counted in this yield.
Key risk: Truck-cycle downturn — heavy-truck orders swing with freight demand and fleet budgets, so a down cycle cuts both earnings and the special dividend, even if the regular rate holds.
Changes if: The regular payout pushes past 50% of earnings, or the December special disappears two years running. Either would signal the cycle has turned against the payout.
- ✓Payout-coverage check: About 31% regular payout — $1.40 indicated against trailing EPS of $4.51 — covered, with most earnings retained. December specials are extra, not counted here.
- ✓Yield check: 1.31% indicated — $0.35/qtr × 4 at the $106.96 close on Oct. 23, 2026. Real, earned regular yield; the variable December special is excluded.
- ✓Dividend growth check: Regular dividend raised in February 2026, from $0.33 to $0.35 a quarter, with a $1.40 special paid in December 2025 on top.
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.