Investors may have to wait years for some companies to pay
higher dividends, but that's not the case withLockheed Martin (
The Bethesda, Md.-based firm has rewarded investors with big
dividend raises for more than a decade. In late September,
Lockheed bumped up its quarterly dividend by 16% to $1.33 a share
from $1.15. That marked the 11th straight double-digit increase.
Lockheed's quarterly dividend has more than doubled in three
Lockheed pays a dividend of $5.32 a share on an annual basis,
which works out to a yield of about 3.8%, or nearly 150 basis
points higher than the S&P 500's yield. Lockheed has the
second-highest yield among 27 dividend-paying stocks in the
Aerospace/Defense group. The company strives to return at least
50% of free cash flow to stockholders through dividends and share
While the company has delivered steady top- and bottom-line
growth in recent years, it announced plans last month to cut
4,000 jobs and close factories due to slowing U.S. defense
spending. Last year, sales to the U.S. government accounted for
82% of total sales. It's hoping that sales of its F-35 fighter
jets to foreign buyers will help make up for the lower defense
spending at home.
The company's full-year earnings are expected to rise 15% to
$9.68 a share this year. Growth is slated to slow to 5% in
Lockheed is pulling back in light trade from a strong rebound
off its 10-week line. The stock has been on a tear since breaking
out from a first-stage cup-with-handle base in late March.
Most of its weekly gains lately have come in above-average
volume. It hasn't had a down week in heavy trade in about two
Lockheed is one of the highest-rated stocks in the
Aerospace/Defense group. RivalNorthrop Grumman (
) is another highly rated stock in the group. It's trading
tightly near an all-time high. Lockheed has a 91 Composite
Rating, while Northrop has a 96.