Brady Has Raised Its Dividend for 40 Years and the 23.5% Payout Ratio Says It Will Continue

• Brady’s 23.5% earnings payout ratio and 1.9x free cash flow coverage provide substantial cushion for its $0.965 annual dividend.

• The company operates with 0.11x debt-to-equity and holds a net cash position of $49.3M.

• Brady has increased dividends for 40 consecutive years with recent growth averaging 3.8% annually.

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Brady Corporation (NYSE:BRC) manufactures identification solutions and workplace safety products, serving industrial customers worldwide. The company pays an annual dividend of $0.965 per share, yielding 1.19%. With 40 consecutive years of dividend increases, Brady has built one of the most reliable income track records in the industrial sector.

Brady’s dividend is backed by substantial earnings cushion. Against trailing twelve month diluted earnings per share of $4.10, the $0.965 annual dividend represents a payout ratio of just 23.5%. This leaves more than three-quarters of earnings available for reinvestment, debt management, or future dividend growth.

In Q1 fiscal 2026, Brady generated $33.4 million in operating cash flow, spent $11.0 million on capital expenditures, and paid $11.5 million in dividends. Free cash flow of $22.4 million covered the dividend 1.9x. Over the trailing twelve months, the company generated approximately $195 million in net income while paying roughly $43 million in total dividends.

Brady operates with minimal leverage. As of Q1 fiscal 2026, the company held $182.7 million in cash against total debt of $176.8 million, including $60.9 million in lease obligations. Excluding leases, debt-to-equity stands at just 0.11x. The company reported a net cash position of $49.3 million as of April 30, 2025.

With shareholders’ equity of $1.24 billion and total assets of $1.79 billion, Brady maintains a fortress balance sheet. Return on equity of 16.7% and profit margins of 12.7% demonstrate efficient capital deployment.

Brady has raised its dividend for 40 consecutive years, qualifying as a Dividend Aristocrat. The most recent increase came in January 2026, when the quarterly payment rose to $0.245 from $0.240. Growth has averaged 3.8% annually over the past five years and 3.6% over ten years.

CEO Russell Schaller stated on the Q3 2025 earnings call: “Our consistently strong cash generation gives us the ability to invest throughout the economic cycle […] And second, we focus on consistently increasing our dividends. At the beginning of this fiscal year, we announced our thirty-ninth consecutive year of annual dividend increases, which is a streak that we’re very proud of.”

CFO Ann Thornton outlined the capital allocation framework: “Our approach to capital allocation is consistent, which is first to use our cash to fund organic sales growth and efficiency opportunities. After funding organic investments and dividends, we then deploy our cash in a disciplined manner for acquisitions where the synergies are clear and for opportunistic share buybacks.”

Dividend Safety Rating: Very Safe

Brady’s 23.5% earnings payout ratio, strong free cash flow generation, minimal debt, and 40-year track record combine to create one of the safest dividends in the industrial sector. Management has explicitly prioritized the dividend in capital allocation, and the balance sheet provides ample cushion even if earnings decline.

Brady is appropriate for income investors who accept the modest 1.19% yield and 3-4% annual growth rate. This is a sleep-well-at-night dividend, not a high-yield play.

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