Getting a higher payout each year is a good thing. Aerospace
giant and defense contractorLockheed Martin (
) has done just that for its shareholders for just over a
Last week, the company raised its quarterly dividend by 16% to
$1.33 a share. The dividend will be paid Dec. 27 to shareholders
of record Dec. 2.
"We're proud to deliver to our shareholders the 11th
consecutive annual double-digit increase of the Lockheed Martin
quarterly dividend rate," said CEO and President Marillyn Hewson
in a press release.
Lockheed Martin's dividend has now more than doubled in the
past three years. At the new rate, the company pays $5.32 a year.
This works out to a yield of about 4.2% vs. around 2.5% for the
S&P 500 index. It has the second highest yield among the 27
dividend-paying stocks in the Aerospace/Defense group.
The company was last featured in
The Income Investor column
on Aug. 23, when its dividend yield was at 3.7%.
Lockheed Martin has vowed to return 50% of free cash flow to
shareholders through dividends and share buybacks. It also lifted
its stock buyback by $3 billion last week. The repurchase program
has no expiration.
The Bethesda, MD.-based firm is a slow and steady grower. Its
five-year earnings and sales growth rates are 4% and 3%,
respectively. It has a five-year Earnings Stability Factor of 3,
indicating a highly steady stream of profits. The U.S. government
is its biggest customer. Last year, 82% of net sales came from
the government. Analysts polled by Thomson Reuters see profit
rising 12% this year and 2% in 2014. Both were recently revised
Lockheed Martin's stock went through a rough patch early in
the year, but has been on a tear since. Shares bolted 40% past a
93.67 buy point from a cup-with-handle base in late March before
easing recently. The stock managed a small gain Tuesday, despite
the budget-related closing of many government agencies.