Covered, but fuller and slow-growing. A 3.39% yield on an 82.2% earnings payout is covered, but fuller than most House cards: $0.84 a quarter, raised only 1.2% from $0.83 in September 2026, leaves little retained from earnings. Free cash flow of about $1.29 billion covers the roughly $0.51 billion annual dividend bill more comfortably than the earnings payout suggests, which is why this is a warning, not a failure — but growth has slowed to about 1.2% a year.
Key risk: Tools demand and leverage — housing and construction cycles drive Tools & Outdoor sales, and an 82% earnings payout leaves little buffer if earnings slip again.
Changes if: The earnings payout pushes past 100%, free cash flow falls toward the roughly $0.51 billion annual dividend total, or the raise slows to zero.
- !Payout-coverage check: Caution — 82.2% of trailing earnings is a full payout, though free cash flow of about $1.29 billion covers the roughly $0.51 billion annual dividend total more comfortably than earnings alone suggest.
- ✓Yield check: 3.39% indicated — $0.84/qtr × 4 at the $99.24 close on Oct. 23, 2026. Real, regular quarterly yield.
- !Dividend growth check: Caution — quarterly dividend raised only 1.2% in September 2026, from $0.83 to $0.84, continuing a long annual-raise run at a slowing pace; the streak length is not stated on the card because it was not verified from company filings.
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.