Covered, raised every year — and levered past 4x. Willis Towers Watson paid $352 million of dividends from $1,116 million of free cash flow in fiscal 2025, 31.5%, a pass, and the quarterly rate has risen every year on the post-merger record, to $0.96 in 2026. Leverage is the caution: net debt of $8,261 million is about 4.6x EBITDA of $1,783 million, in the fail band, and under the filter it grades warn rather than failing on its own while coverage passes. The 1.18% trailing yield clears the sub-1% line.
Key risk: Debt at 4.6x EBITDA leaves the dividend one bad advisory cycle from competing with deleveraging for the same cash.
Changes if: Net debt/EBITDA falls below 3x, or the free-cash-flow payout crosses 60%.
- ✓Cash-flow cover 31.5% of FY2025 free cash flow, pass (<60%).
- !Leverage About 4.6x, fail band (>4x) — a caution, not a fail, while coverage passes; the debt load is the swing factor.
- ✓Growth record Raised every year on the post-merger record, 2016 to 2026; no cut in 10 years.
- ✓Trap screen Yield 1.18%, 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.