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Deere (NYSE:DE | DE price prediction), widely considered the world’s largest maker of agricultural equipment, pays its next quarterly dividend of $1.62 per share on May 8, 2026. With payouts remaining steady at $1.62 over the past several quarters and the bottom line of the ag cycle, income-focused investors want to know if the dividend is safe. Let’s find out.
dividend snapshot
| metric | price |
|---|---|
| annual dividend | $6.48 |
| dividend yield | 1.1% |
| Quarterly Rate Streak | 5 quarters at $1.62 |
| final rise | Q4 2024 ($1.47 to $1.62) |
| status of noble/king | No |
Payout ratio provides real relief
Trailing EPS of $17.73 against a dividend of $6.48, Deere is paying out almost a third of profits. Cash flows confirm the same picture: in FY2025 the company generated $7.459 billion in operating cash flows and paid $1.720 billion in common dividends, providing considerable relief.
| metric | ttm | assessment |
|---|---|---|
| payment of earnings | ~37% | Healthy |
| FCF coverage | 1.9x | Healthy |
| ocf coverage | ~4.3x | strong |
One caveat: Q1 FY2026 operating cash flow was negative $890 million, a seasonal trough that is common for ag equipment. The dividend is funded by Q4’s harvest-season cash flows, not January’s weak receipts.
Captive finance enhances leverage optics
| metric | price |
|---|---|
| total liabilities | $77.079B |
| shareholders equity | $26.307b |
| cash on hand | $6.798B |
The headline leverage figures look hefty, but most of the debt belongs to John Deere Financial, the captive finance arm that funds dealer and customer receivables. The leverage at the equipment-operation level is much cleaner. At 16.2x, Deere’s interest coverage is exceptionally strong.
The streak is stopped, but the record is clean
| financial year | dividend payment | year after year |
|---|---|---|
| 2025 | $1.72B | +7.2% |
| 2024 | $1.61B | +12.5% |
| 2023 | $1.43B | +8.7% |
| 2022 | $1.31B | +10.9% |
The quarterly rate has been frozen at $1.62 since the beginning of 2025, so Deere is not moving to the bottom of the cycle. Notably, since 2010, Deere has never cut its quarterly dividend, even keeping it steady. 2020 pandemic year At $0.76.
Management returns as frames through-cycle
CFO Josh Jeppesen said on the Q1 FY2026 earnings call: “During the quarter, we returned approximately $750 million of cash to shareholders through dividends and share repurchases, demonstrating that strong financial performance through the cycle supports both reinvestment in the business and shareholder returns.” CEO John May said that “2026 represents the bottom of the current cycle.” This is the language of the comfortable board regarding payment.
Verdict: Safe, with restrictions on development
Dividend Safety Rating: Safe. FCF covers the dividend about 2x, the earnings payout is about 37%, and FY2026 guidance calls for $4.5 billion to $5.0 billion in net income and $4.5 billion to $5.5 billion in equipment-ops cash flow, well above the dividend bill. For income-focused investors, the dividend looks well supported, although the next dividend increase may be delayed until agricultural demand recovers. The risk scenario worsens if large-ag declines extend beyond the previously guided 15% to 20% decline. However, the check dated May 8 looks pretty solid.