Lockheed Martin Corporation
) has announced that it will increase the quarterly dividend rate
to $1.15 per share, up approximately by 15 cents from the current
payout of approximately $1.00 per share.
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
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The proposed hike would bring the annual dividend to $4.60, up 15%
from the previous payout. The increased quarterly dividend will be
paid on December 28, 2012 to shareholders of record at the close of
business on December 3, 2012.
With the current annual dividend rate of $4.60 and the current
price of $92.46 (as of September 27, 2012), the company had a
dividend yield of approximately 5%.
This is the tenth consecutive annual double-digit increase of the
company's dividend. In September 2011, the company had increased
its quarterly dividend by 33% or 25 cents per share from 75 cents
per share to approximately $1.00 per share. The company had also
increased its share repurchase authority by $2.5 billion under its
share repurchase program. During the second quarter of 2012, the
company repurchased 2.2 million shares at a cost of $186 million.
Currently, the company has remaining authorization of $2.9 billion
for future share repurchases.
Recently, in September 2012, one of the company's peers
Northrop Grumman Corporation
) has authorized an increase in the company's outstanding share
repurchase authorization to $2 billion of common stock in order to
focus on improving shareholder value.
Lockheed's cash and cash equivalents were $3.8 billion at the end
of June 30, 2012, versus $3.3 billion at the end of June 30, 2011.
The cash position seems to be stable enough to maintain its trend
of dividend increase.
Moreover, the company is flooded with contracts. Recently, Lockheed
had received a $111 million Modernized Target Acquisition
Designation Sight/Pilot Night Vision Sensor Performance Based
Logistics contract from the U.S. Army. A few days back, the company
received a five-year contract worth $1.05 billion to provide more
than 200 digital cockpits and integrated mission systems and
sensors for the Navy's MH-60R "Romeo" and MH-60S "Sierra"
Based in Bethesda, Maryland, Lockheed Martin is a global security
and aerospace company that is principally engaged in the research,
design, development, manufacture, integration and sustainment of
advanced technology systems, products and services.
Lockheed Martin is the largest U.S. defense contractor that
guarantees a steady inflow of follow-on orders from a leveraged
presence in the Army, Air Force, Navy and IT programs. Going
forward, we believe Lockheed Martin has significant upside
potential based on the Obama administration's focus on Intelligence
Surveillance Reconnaissance (ISR), unmanned systems, force
protection, cyber security, and missile defense.
Lockheed is focusing on fulfilling the commitments made to
customers while increasing the efficiency of its operations,
despite the uncertain environment. The company presently retains a
short-term Zacks #2 Rank (Buy) that corresponds with our long-term
Outperform recommendation on the stock.
Lockheed is expected to release its third-quarter 2012 results on
October 22, 2012. The Zacks Consensus Estimates for third-quarter
2012 and fiscal 2012 are currently at $1.85 per share and $8.10 per