Covered, compounding — income-light. A 1.15% yield is modest income, but it is covered and still growing: $0.88 a quarter on a 36.5% payout, raised 4.8% in 2026 from $0.84, extending a streak of 32 consecutive years of increases. Q2 2026 revenue grew 9.4% to $6.59 billion, so the payout grows from operating growth rather than from stretching coverage.
Key risk: Procedure and pricing exposure — orthopaedics and MedSurg volumes follow hospital capital budgets and procedure demand, and the shares carry a premium valuation (about 32× earnings), so a growth miss can move the price far more than the dividend.
Changes if: the payout pushes toward 60% of earnings, or the annual raise stops. A skipped raise after 32 years would say more than any single payout figure.
- ✓Payout-coverage check: 36.5% of earnings per StockAnalysis — $3.52 indicated. Covered with most earnings retained for growth and acquisitions.
- ✓Yield check: 1.15% indicated — $0.88/qtr × 4 at the $307.15 close on Oct. 23, 2026. Real, earned yield for a single stock, not a special or a return of capital.
- ✓Dividend growth check: 32 consecutive years of increases; the 2026 raise lifted the quarterly dividend 4.8%, from $0.84 to $0.88.
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.