Covered, compounding. A 3.04% yield on a payout near 47% of trailing earnings is well covered: $1.16 a quarter, raised in June 2026 from $1.14, with the company stating 2026 is on track to be its 55th consecutive year of annual dividend increases.
Key risk: Retail competition and price-sensitive shoppers — softer discretionary demand, especially in home goods and apparel, could stall the sales recovery the payout relies on.
Changes if: The payout pushes well past 47% on falling earnings, or an annual increase is skipped after 55 years. Either would break the compounding case.
- ✓Payout-coverage check: About 47% of trailing earnings, and about 46% of free cash flow on a trailing basis in company coverage — covered with room to reinvest.
- ✓Yield check: 3.04% indicated — $1.16/qtr × 4 at the $152.76 close on Oct. 23, 2026. Real, earned yield for a single stock.
- ✓Dividend growth check: 55th consecutive year of increases on track in 2026, per the company's June 2026 announcement; the latest raise lifted the quarterly dividend 1.8%, from $1.14 to $1.16.
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.