Lockheed Shares More Profit, Raises Dividend & Buyback Authorization

Lockheed Martin Corp. LMT announced that its board of directors approved a 4.8% hike in its quarterly dividend to $3.30 per share, marking the 22nd consecutive annual dividend hike. The revised quarterly dividend is payable on Dec. 27, 2024, to shareholders of record at the close of the business on Dec. 2, 2024.

The company's new annualized dividend rate is $13.20. The current dividend yield is 2.08%, better than the Zacks S&P 500 composite's 1.24%.

Along with dividend payments, Lockheed's management continues to increase shareholder value by repurchasing shares. The board authorized an additional $3 billion for share repurchases, which resulted in a total authorization under the repurchase program of nearly $10 billion.

Can Lockheed Sustain Dividend Hikes?

Lockheed has a platform-centric focus and leveraged presence in the Army, Air Force, Navy and IT programs of the U.S. Department of Defense that guarantee a steady inflow of follow-on orders. The company continues to clinch big defense deals from the U.S. government and allied countries. As a consequence, it exited the second quarter of 2024 with a record backlog of $158.3 billion, backed by increasing demand and a rising global defense budget. This shall boost LMT's sales growth and cash flow in the coming quarters.

Apart from domestic orders, the company also enjoys the advantage of having a wide international customer base. In the second quarter of 2024, 25.8% of total net sales were from international customers. The company is focused on expanding its international footprint, which continues to support earnings.

Lockheed Martin is the largest U.S. defense contractor with a platform-centric focus that guarantees a steady inflow of follow-on orders from its leveraged presence in the Army, Air Force, Navy and IT programs. The F-35 program continues to be a key growth program for Lockheed. The production of F-35 jets is expected to continue for many years ahead, given the U.S. government's current inventory target of 2,456 aircraft for the Air Force, Marine Corps and Navy. This will support its top line and boost its earnings.

Courtesy of Lockheed's global presence, strong backlog, F-35 program and contract wins, the company continues to generate strong operating cash flow, which provides assurance that it will be able to sustain shareholder-friendly moves in the future as well.

Other Aerospace Companies' Recent Dividend Hikes

Here are some defense companies that have been rewarding shareholders with impressive dividend payouts.
On May 14, 2024, Northrop Grumman Corp. NOC announced that its board of directors approved a 10% hike in its quarterly dividend to $2.06 per share, marking the 21st consecutive annual dividend hike.
Northrop boasts a long-term (three to five years) earnings growth rate of 8.7%. The Zacks Consensus Estimate for NOC's 2024 sales implies an improvement of 5.4% from the previous year's level.

On May 10, 2024, Curtiss-Wright CW announced that its board of directors declared a 5% increase in the quarterly dividend to 21 cents per share. The company authorized an additional $300 million for future share repurchases, increasing the total available authorization to $400 million.

Curtiss-Wright boasts a four-quarter earnings surprise of 11.52%, on average. The Zacks Consensus Estimate for CW's 2024 sales implies an improvement of 7.1% from the prior-year figure.

On May 2, 2024, RTX Technologies RTX announced a dividend of 63 cents per, calling for an increase of 6.8% over the prior quarter's dividend amount.

RTX Technologies has a long-term earnings growth rate of 10.4%. The Zacks Consensus Estimate for RTX's 2024 sales calls for an improvement of 7% from the prior-year figure.

LMT Stock Price Movement

In the past three months, shares of LMT have rallied 31.1% compared with its industry's rise of 12.2%.

Image Source: Zacks Investment Research

LMT's Zacks Rank

Lockheed Martin currently carries a Zacks Rank #2 (Buy).

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