Covered many times over, but the 2020 suspension and a sub-1% trailing yield keep it a growth holding. Ralph Lauren paid $1.00 a quarter in October 2026, $4.00 annualized, after raising the rate every year since resuming in 2021. Dividends of $195 million are about 23% of approximate fiscal 2026 free cash flow, a pass, and the balance sheet holds net cash, a pass. Two cautions grade it warn: the dividend was suspended in 2020, inside the 5-to-10-year review band, and the trailing yield of 0.98% sits under the 1% income line.
Key risk: Luxury demand is cyclical and the brand depends on full-price selling; a demand downturn cuts the earnings that fund the raises long before it threatens the current rate.
Changes if: The trailing yield rises above 1% and the post-suspension record passes five more years, or free-cash-flow payout crosses 60%.
- ✓Cash-flow cover About 23% of approximate FY2026 free cash flow, pass (<60%).
- ✓Leverage Net cash position, pass (<3x).
- !Dividend history Suspended in 2020, resumed 2021 and raised every year since; cut 5-10 years ago is the review band, a caution.
- !Yield / trap review Trailing yield 0.98%, under the 1% line: a growth holding, not income. 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.