"PEY tracks the NASDAQ US Dividend Achievers 50 Index, a yield-weighted screen of mid-cap dividend payers with a record of consecutive annual increases. Yield-weighting leans into the highest payers, where dividend coverage tends to crack first. The six names below show what that tradeoff looks like."
"T. Rowe Price ( NASDAQ:TROW | TROW Price Prediction) is the textbook holding. The quarterly payout rose from $1.24 in 2024 to $1.27 in 2025 to $1.30 in Q1 2026, extending a streak back to 1999. With trailing EPS of $9.32 against a $5.11 annualized dividend, the payout ratio sits near 55%, the cushion you want from an asset manager whose AUM swings with markets. Q1 2026 operating cash flow of $966 million confirms the dividend is funded from real earnings."
"LyondellBasell Industries ( NYSE:LYB) posted a $738 million net loss in 2025 while paying out $1.76 billion in dividends, funding distributions from cash reserves rather than earnings. The market got its answer in March: the quarterly dividend was cut from $1.37 to $0.69, a 50% reduction. For PEY, that is the dividend-achiever thesis breaking in real time. The fact that LYB is up 68% year to date reflects relief that management rebased the payout."
PEY holds 50 U.S. stocks with the highest yields that have increased dividends for at least 10 consecutive years. The fund tracks a yield-weighted index that favors higher payers, where dividend coverage can weaken first. T. Rowe Price shows a long dividend streak supported by earnings and cash flow, with a payout ratio around 55%. LyondellBasell shows the risk of yield-weighting: it reported a large net loss while paying dividends, then cut its quarterly dividend by 50% after funding distributions from cash reserves. Flowers Foods continues a dividend increase, while guidance implies tighter earnings support ahead.
Read at 24/7 Wall St.
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