The Energy and Pharma Giants Quietly Funding HDV’s 3% Yield, and How Safe Each One Is

1 hour ago 1

David Beren

Wed, August 12, 2026 astatine 11:12 AM CDT 4 min read

Quick Read

XOM and JNJ gain 'Very Safe' dividend ratings wrong HDV, backed by involvement sum of 56x and 64 consecutive yearly raises.
AbbVie's Skyrizi and Rinvoq are replacing Humira faster than expected, but Net Debt/EBITDA of 2.3x keeps a watchlist tag connected its dividend.
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The iShares Core High Dividend ETF (NYSEARCA:HDV) leans hard connected 2 sectors to money its payout. Energy and pharma names relationship for the apical 4 holdings, combining for 25.96% of nett assets. With HDV up 19.66% year-to-date and yielding astir 3%, I privation to cognize whether the checks these 4 giants nonstop to BlackRock are really safe.

A long, metallic metallic lipid pipeline, consisting of 2 parallel pipes, extends crossed a agrarian scenery from the close foreground to the distant horizon. The pipeline is elevated connected a bid of grey factual supports. The foreground is simply a vibrant tract of greenish crops, transitioning to a drier, airy brownish tract further back, each nether a bluish entity dotted with fluffy achromatic clouds.

The Four Dividends Powering HDV

Exxon: The Cleanest Balance Sheet successful the Group

At $4.08 per stock against $5.85 successful trailing 12-month EPS, Exxon runs a 69.74% net payout ratio. Fiscal twelvemonth 2025 escaped currency travel of $26.13 cardinal easy covered the dividend, and involvement sum of 56.28x is bonzer by immoderate measure. CEO Darren Woods highlighted "an industry-leading equilibrium expanse that gives america unmatched flexibility." Rating: Very Safe.

Chevron: Hess Cash Flow Reset the Math

After the Hess close, Chevron delivered $18.10 cardinal successful escaped currency travel during the 2nd 4th of 2026, representing a 272% increase, and the institution reduced indebtedness by $8.41 cardinal successful the aforesaid quarter. Net Debt to EBITDA sits astatine 1.08x, with involvement sum of 13.70x. CEO Mike Wirth flagged that the "$3 cardinal successful yearly run-rate savings" people was deed six months up of schedule. The payout ratio is elevated astatine $6.98 connected $10.18 successful earnings, though currency flows comfortably screen it. Rating: Safe.

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Johnson & Johnson: The Dividend King Earns Its Crown

With an net payout ratio of 60.16% connected $8.71 EPS, JNJ leaves itself a existent cushion. Fiscal twelvemonth 2025 escaped currency travel of $19.70 cardinal and raised 2026 guidance of $11.45 to $11.65 adjusted EPS underwrite the payout, adjacent with first-quarter litigation charges successful the mix. CEO Joaquin Duato called 2026 "a twelvemonth of accelerated maturation and impact." An AAA recognition standing and 64 consecutive dividend raises seal the case. Rating: Very Safe.

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