On an indicative earnings-payout basis, DICK’S Sporting Goods covers its annualized dividend more comfortably than Best Buy: about 42%–46% of its FY2026 diluted EPS outlook, versus about 56%–57% of Best Buy’s FY2027 adjusted diluted EPS outlook. These are calculations from company guidance, not company-reported payout ratios, and the different fiscal years and EPS definitions make the comparison directional rather than perfectly like for like.
How the dividend coverage comparison works
An earnings payout ratio compares a company’s dividend per share with its earnings per share. Using four times each latest quarterly dividend as the annualized rate, then dividing by the company’s stated EPS outlook, gives this comparison:
| Company | Latest quarterly dividend | Annualized dividend rate | EPS outlook used | Implied earnings payout |
|---|---|---|---|---|
| DICK’S Sporting Goods | $1.25 per share, declared August 24, 2026 | $5.00 per share, if maintained | FY2026 diluted EPS: $10.94–$11.94 | About 42%–46%, calculated from company disclosures |
| Best Buy | $0.96 per share, reaffirmed in August 2026 | $3.84 per share, if maintained | FY2027 adjusted diluted EPS: $6.70–$6.90 | About 56%–57%, calculated from company disclosures |
The calculation divides the annualized dividend by the high and low ends of the respective EPS range. A lower payout ratio means a smaller share of the forecast earnings would be needed to fund the dividend, all else equal. It does not establish that the dividend is guaranteed or that one stock is a better investment.
What DICK’S dividend and outlook indicate
DICK’S board declared a quarterly dividend of $1.25 per share on August 24, 2026, payable September 25, 2026. Four quarterly payments at that rate would equal $5.00 per share over a year. The company’s FY2026 diluted EPS guidance is $10.94–$11.94. DICK’S 2026 Form 10-Q and company filings
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The EPS outlook is not a simple measure of recurring operating earnings. The company says it includes share dilution and costs related to the Foot Locker acquisition, expected store-model redesign charges, and offsets for settlement income and tariff refunds. It also describes a more cautious view of the balance of the year amid marketplace conditions. Those inclusions matter when interpreting the payout calculation: guidance can change, and the range reflects assumptions about both costs and offsets.
What Best Buy dividend and outlook indicate
Best Buy approved a 1% dividend increase in March 2026, setting the quarterly amount at $0.96 per share; its August 2026 Q2 release declared the same amount. At four payments a year, that is an annualized rate of $3.84 per share if maintained. After Q2 FY2027, Best Buy raised its adjusted diluted EPS guidance to $6.70–$6.90. The payout estimate uses adjusted EPS, not unadjusted or reported diluted EPS. Best Buy FY2026 Q4 and Q2 FY2027 releases
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Because Best Buy’s guidance is adjusted while DICK’S figure is diluted EPS guidance, the percentages do not put identical earnings measures side by side. Best Buy’s outlook is also for FY2027, while DICK’S is for FY2026. Treat the result as a useful directional check, not a definitive head-to-head measure.
Why earnings coverage is not cash-flow coverage
Dividends are paid in cash, so operating cash flow and capital spending also matter. Best Buy reported $1.296 billion in cash from operating activities for the six months ended August 1, 2026, compared with $783 million in the prior-year period. The company attributed much of the change to the timing and volume of inventory purchases and payments, as well as income-tax payment timing. Best Buy Q2 FY2027 Form 10-Q
Operating cash flow is not free cash flow: capital expenditures must be subtracted to calculate free cash flow. The available figures do not establish an aligned, comparable free-cash-flow coverage calculation for both companies, so they cannot support a definitive cash-flow coverage ranking.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What can change the dividend
Neither annualized figure should be read as a promise of future payments. DICK’S says future dividends and their amounts and dates require board authorization and depend on factors including future earnings, cash flows, financial requirements, and other considerations. Best Buy’s latest declaration likewise establishes the current quarterly dividend, not a commitment to keep it unchanged. Earnings guidance and dividend decisions can both change.
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