3 Defense Stocks With Strong Dividend Track Records

Military spending is consistently a significant part of the United States budget, and there are no signs of that abating any time soon. In fact, for the 2025 fiscal year, the U.S. Department of Defense has requested $850 billion in defense spending, a number that represents approximately 3% of the U.S. GDP. The vast defense budget is deployed across a wide variety of contractors, many of which are publicly traded. There are a few standouts that have a solid dividend yield and a consistent growth story.

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An Aristocrat In The Making

Lockheed Martin LMT is primarily known as a defense technology company. Its wide portfolio of products features aircraft, including both helicopters and military planes; radar and electronic warfare; submersible vehicles; space technology; and missiles. It frequently receives key contracts from the U.S. Department of Defense, including an over $500 million contract update with the Air Force. 

In its most recent quarter, it achieved net sales of over $17.2 billion. But what might most interest investors is the money it returns to investors. During the quarter, it announced $1.8 billion in share buybacks and dividends, returning $780 million to shareholders in dividends. 

Lockheed Martin's forward dividend yield is 2.73%. While some companies decreased or paused their dividends during the pandemic, Lockheed continued to grow its dividend at $3.15 or $12.30 annualized. It is in its 24th year of increasing dividends, bringing it very close to dividend aristocrat status. While the stock price has fluctuated, it has risen by nearly 25% over the past five years. Lockheed Martin's $159 billion backlog should keep business steady for years.

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A Former Dividend Aristocrat Still Shines

In 2023, Raytheon rebranded to RTX, bringing together Collins Aerospace, Pratt & Whitney, and Raytheon under a single name. Raytheon saw defense sales rise by 7% during the first quarter. Like Lockheed Martin, RTX has a substantial backlog of business, over $202 billion, as demand grows for its technology-driven products. RTX is heavily tied to the U.S. military but receives key contracts from other nations, including a $1.2 billion contract from Germany for radar, launchers, and command and control stations.

The dividend story is more modest here. RTX delivers a 2.52% forward dividend yield, but the annual dividend is $2.36. However, it was a dividend aristocrat until it decreased its dividend during the 2020 pandemic. While it has yet to achieve the dividend it was delivering before the pandemic, it has raised its dividend consistently over the past four years, and the stock price is up over 20% during the last five years. 

By Land, Sea, And More

Founded in 1952, General Dynamics has multiple business units related to defense, including aerospace, combat systems, and marine systems. Like RTX, its strength expands far beyond the U.S. military. It has contracts with various nations, including Romania, Austria, and Canada, delivering combat vehicles, submarines, and more. Gulfstream Aerospace is also a wholly owned subsidiary of General Dynamics, giving it more than military strength. 

During its most recent quarter, General Dynamics paid $361 million in dividends. The forward dividend yield is 2.02% and the annual dividend is $5.36. It started paying a dividend in 2012 and has raised that dividend consistently over time. It has a $93.7 billion backlog of business, up 4.4% year over year. The stock price has risen approximately 50% over the past five years. 

Defense spending may fluctuate over time, but it is unlikely to disappear from national budgets anytime soon. That is a powerful incentive for companies that have a history of contracts with national militaries to keep innovating, capture more of that money over time, and potentially share profits with investors. 

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