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 a huge cushion against its $0.965 annual dividend.

• The company has a debt-to-equity ratio of 0.11 times and holds a net cash position of $49.3 million.

• Brady has increased its dividend for 40 consecutive years, most recently at an average annual rate of 3.8%.

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Brady Corporation (NYSE: BRC) manufactures identification solutions and workplace safety products to serve industrial customers worldwide. The company pays an annual dividend of $0.965 per share, giving it a dividend yield of 1.19%. Brady has increased its dividend for 40 consecutive years, building one of the most reliable earnings records in the industrial sector.

Brady’s dividend is supported by a sizable earnings cushion. Trailing 12-month diluted earnings per share were $4.10, and the $0.965 annual dividend means the payout ratio is just 23.5%. This leaves more than three-quarters of earnings available for reinvestment, debt management or future dividend growth.

In the first quarter of fiscal 2026, Brady generated $33.4 million in operating cash flow, incurred $11.0 million in capital expenditures, and paid $11.5 million in dividends. Free cash flow of $22.4 million equals 1.9 times dividends. Over the last 12 months, the company generated net profits of approximately $195 million, while paying out total dividends of approximately $43 million.

Brady operates with minimal leverage. As of the first quarter of fiscal 2026, the company had $182.7 million in cash and total debt of $176.8 million, including $60.9 million in lease debt. Excluding leases, the debt-to-equity ratio is just 0.11 times. As of April 30, 2025, the company reported a net cash position of $49.3 million.

With shareholders’ equity of $1.24 billion and total assets of $1.79 billion, Brady maintains a strong balance sheet. A return on equity of 16.7% and a profit margin of 12.7% reflect efficient capital allocation.

Brady has raised its dividend for 40 consecutive years, qualifying it as a Dividend Aristocrat. The most recent increase occurred in January 2026, when the quarterly payment increased from $0.240 to $0.245. The average annual growth rate over the past five years has been 3.8%, and the average annual growth rate over the past ten years has been 3.6%.

“Our continued strong cash generation positions us to invest throughout the economic cycle,” CEO Russell Schaller said during the 2025 third-quarter earnings call. […] Second, we are focused on continuing to grow our dividends. At the beginning of this fiscal year, we are proud to announce our thirty-ninth consecutive annual dividend increase. “

CFO Ann Thornton outlined the capital allocation framework: “Our approach to capital allocation is consistent, using our cash first to fund organic sales growth and efficiency opportunities. After funding organic investments and dividends, we then use cash in a disciplined manner for synergistic acquisitions and opportunistic stock repurchases.”

Dividend Safety Rating: Very Safe

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

Brady is suitable for income investors who accept a modest 1.19% yield and 3-4% annual growth. This is a bonus for a good night’s sleep, not a high-paying game.

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