Lockheed Martin Delivers Rising Dividends - Fast
Investors may have to wait years for some companies to pay higher dividends, but that's not the case withLockheed Martin ( LMT ).
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 years.
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 buybacks.
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 2014.
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 months.
Lockheed is one of the highest-rated stocks in the Aerospace/Defense group. RivalNorthrop Grumman ( NOC ) 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.