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 the payout held flat at $1.62 across the past several quarters and the ag cycle bottoming, income-focused investors want to know if the dividend is secure. Let’s find out.
Dividend Snapshot
| Metric | Value |
|---|---|
| Annual Dividend | $6.48 |
| Dividend Yield | 1.1% |
| Quarterly Rate Streak | 5 quarters at $1.62 |
| Last Increase | Q4 2024 ($1.47 to $1.62) |
| Aristocrat/King Status | No |
Payout Ratios Leave Real Breathing Room
On trailing EPS of $17.73 against a $6.48 dividend, Deere is paying out roughly a third of profits. Cash flow confirms the same picture: in FY2025 the company generated $7.459 billion in operating cash flow and paid $1.720 billion in common dividends, leaving plenty of cushion.
| Metric | TTM | Assessment |
|---|---|---|
| Earnings Payout | ~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’s normal for ag equipment. The dividend is funded by Q4’s harvest-season cash flow, not by January’s weaker receipts.
Captive Finance Inflates the Leverage Optics
| Metric | Value |
|---|---|
| Total Liabilities | $77.079B |
| Shareholders’ Equity | $26.307B |
| Cash on Hand | $6.798B |
The headline leverage figures look heavy, but most of the debt sits within John Deere Financial, the captive finance arm that funds dealer and customer receivables. Leverage at the equipment-operations level is far cleaner. At 16.2x, Deere’s interest coverage is exceptionally robust.
The Streak Has Paused, but the Record Is Clean
| FY | Dividends Paid | YoY |
|---|---|---|
| 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 early 2025, so Deere is not raising into the cycle bottom. Notably, since 2010, Deere has never cut its quarterly dividend, even holding flat through the 2020 pandemic year at $0.76.
Management Frames Returns as Through-Cycle
CFO Josh Jepsen said on the Q1 FY2026 earnings call: “Over the quarter, we returned nearly $750 million in cash to shareholders through dividends and share repurchases, demonstrating that strong through-cycle financial performance supports both reinvestment in the business and shareholder return.” CEO John May added that “2026 represents the bottom of the current cycle.” That’s the language of a board comfortable with the payout.
Verdict: Safe, With a Pause on Growth
Dividend Safety Rating: Safe. FCF covers the dividend nearly 2x, the earnings payout is near 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, though the next dividend increase may be delayed until agricultural demand recovers. The risk case worsens if large-ag declines extend beyond the 15% to 20% drop already guided. However, the May 8 check looks rock solid.
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