Covered, compounding — off-price cash, modest yield. A 1.32% yield on $0.48 a quarter, raised from $0.425 in February 2026, is covered at about a 36% trailing payout. Q2 fiscal 2027 revenue rose 5.4% to $15.18 billion with adjusted EPS up 11% to $1.22, and full-year adjusted EPS guidance was raised to $5.15–$5.20 — the dividend rests on that operating beat, not on leverage.
Key risk: Marmaxx execution and margin pressure — wage, freight, and sourcing costs, or a merchandising miss at the largest banner, compress the margin that funds the payout.
Changes if: The payout pushes well past about 36%, or comparable sales turn negative at Marmaxx.
- ✓Payout-coverage check: About 36% trailing — the $1.92 indicated dividend leaves most earnings retained for stores and growth.
- ✓Yield check: 1.32% indicated — $0.48/qtr × 4 at the $145.06 close on Oct. 23, 2026. Ordinary cash dividend, not a special.
- ✓Dividend growth check: Raised in February 2026, from $0.425 to $0.48, about 13%; 5 years of increases counted.
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.