A spin-off's first regular dividend, covered many times over. Qnity Electronics began trading on the New York Stock Exchange on November 1, 2025, when DuPont spun off its electronics business, and declared its first regular quarterly dividend of $0.08 on October 14, 2026, payable December 15, 2026 — the $0.14 per share in fiscal 2025 filings is the stub-period figure from the separation, not a comparable annual rate. The annualized $0.32 is about 8.1% of trailing free cash flow of about $825 million, a pass. Leverage of about 3.1x on a reconstructed EBITDA is in the review band, there is no five-year record, and the 0.26% yield on the current rate is under 1%, so the card is graded warn.
Key risk: Everything here is first-year evidence: a new capital structure, a reconstructed leverage figure, and one dividend declaration — the grade rests on the cash flow, not on a record.
Changes if: The quarterly rate is raised, or the dividend is cut.
- ✓Cash-flow cover About 8.1% of trailing free cash flow on the annualized new rate, pass (<60%).
- !Leverage About 3.1x on a reconstructed basis, review band (3–4x) — a caution on an approximate figure.
- !Growth record New payer, spin-off Nov 2025 — no 5-year record, so a caution under the filter, not a fail.
- !Trap screen Yield 0.26%, under 1% — warn as a growth holding; no cut, payout under 100%.
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.