Covered, net cash, seventeen straight years of raises. Williams-Sonoma paid $232 million of dividends from $1,492 million of free cash flow in fiscal 2025, 15.6%, a pass, and holds $1,213 million of cash with no funded debt. The board raised the quarterly dividend 15% to $0.76 in March 2026, the seventeenth straight year of increases. The 1.14% trailing yield clears the sub-1% line and every check passes, so the card is graded good.
Key risk: Home-furnishings demand is cyclical and tariff-exposed — the dividend is small against cash flow, but the raise record depends on the cycle holding.
Changes if: The free-cash-flow payout crosses 60%, or the dividend is cut.
- ✓Cash-flow cover 15.6% of FY2025 free cash flow, pass (<60%).
- ✓Leverage Net cash, pass (<3x).
- ✓Growth record Seventeen straight years of increases, per the March 2026 company release; no cut in 10 years.
- ✓Trap screen Yield 1.14%, no cut, payout under 100%; 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.