Covered, rising, and holding net cash — the dividend is a small claim on a cash-rich chip supplier. Skyworks pays $0.71 a quarter, $2.84 annualized, raised every year in the record shown from $0.44 in 2021. Annualized dividends of about $453 million are about 28% of 2025 free cash flow of $1,646 million, a pass, and the company holds net cash, a pass. The quarterly rate has risen every year with no cut. The risk is concentration, not coverage: mobile-chip demand and one large customer drive the earnings behind the payout.
Key risk: A single large smartphone customer and the mobile cycle drive revenue; a design loss or handset downturn cuts earnings faster than it cuts the dividend, until coverage follows.
Changes if: Free-cash-flow payout crosses 60%, leverage passes 3x, or the raise streak breaks.
- ✓Cash-flow cover About 28% of FY2025 free cash flow on the annualized rate, pass (<60%).
- ✓Leverage Net cash position, pass (<3x).
- ✓Dividend history Raised every year in the record shown; no cut in 10 years.
- ✓Trap screen Yield 3.26%, payout under 100% on cash flow, no cut; not a 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.