Covered, compounding — card credit, low payout. A 1.85% yield on a 13.9% payout is very well covered: $0.34 a quarter, raised in May 2026 from $0.30, after Q3 2026 earnings of $2.68 a share beat expectations and net charge-offs improved to about 4.79%. The payout takes only a small slice of earnings, leaving room for further raises if consumer credit holds.
Key risk: Consumer card credit — Synchrony's earnings are store-card and consumer lending, so a rise in delinquencies or charge-offs from the Q3 2026 level of about 4.79% would hit earnings fast, even at a low payout.
Changes if: The payout pushes well past 13.9%, or net charge-offs climb materially from about 4.79% while purchase volume stalls. Credit, not the payout ratio alone, is the tripwire here.
- ✓Payout-coverage check: 13.9% — the $1.36 indicated dividend costs only a small slice of earnings, leaving most earnings retained.
- ✓Yield check: 1.85% indicated — $0.34/qtr × 4 at the $73.64 close on Oct. 23, 2026. Real, earned yield from consumer-lending earnings, not a special or a return of capital.
- ✓Dividend growth check: Raised in May 2026 from $0.30 to $0.34 a quarter; the latest declaration, Oct. 20, 2026, holds that $0.34 rate, payable Nov. 16, 2026.
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.