Covered many times over — and yielding under 1%, a growth holding. Steel Dynamics paid $271 million of dividends from $1,862 million of free cash flow in fiscal 2025, 14.6%, a pass, and net debt of $3,069 million is 0.9x EBITDA of $3,589 million, a pass. The quarterly rate has risen for 14 straight years, to $0.53 in February 2026. Every check passes except the yield: 0.84% trailing is under 1%, so the card is graded warn as a growth holding under §1, not income.
Key risk: Steel is cyclical: the payout is tiny against current cash flow, but a steel downturn cuts the cash flow first and the raise record second.
Changes if: The trailing yield rises above 1%, or the dividend is cut.
- ✓Cash-flow cover 14.6% of FY2025 free cash flow, pass (<60%).
- ✓Leverage 0.9x, pass (<3x).
- ✓Growth record 14 straight years of increases; no cut in 10 years.
- !Trap screen Yield 0.84%, no cut, payout under 100%; not a trap pattern — but under 1%, so warn as a growth holding.
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.