Can Howmet Continue Its Strong Capital Returns to Shareholders?
Howmet Aerospace Inc. HWM is a leading provider of advanced engineered solutions for customers in the commercial aerospace, defense and transportation markets. Some of its core products include components used in jet engines, fastening systems, forged wheels and titanium structural parts for defense and aerospace applications.
The company’s commitment to reward its shareholders through dividends and share buybacks is encouraging. In the first six months of 2026, HWM distributed $97 million in dividends. In July 2026, it raised its quarterly dividend by 17% to 14 cents per share, equivalent to 56 cents annually. Additionally, through July, the company had repurchased $800 million worth of shares year to date.
Howmet’s shareholder-friendly policies are supported by its healthy liquidity position. Exiting second-quarter 2026, the company’s cash equivalents were $563 million, higher than its short-term borrowings of $450 million. This implies that it has sufficient cash to meet its short-term debt obligations.
In the first six months of the year, Howmet generated cash of $1.04 billion from operating activities (up 48% year over year), while its free cash flow totaled $838 million (up 75% year over year). For 2026, HWM expects free cash flow in the range of $1.85-$1.95 billion, conducive to its shareholder-friendly policies.
Do HWM’s Peers Focus on Returning Capital to Shareholders?
GE Aerospace GE distributed $873 million in dividends and repurchased $4.2 billion worth of shares in the first half of 2026. In February 2026, GE Aerospace also increased its quarterly dividend by 30.6% to 36 cents per share. GE currently forecasts free cash flow of $8.9-$9.2 billion for 2026, above its earlier projection of $8.0-$8.4 billion.
Parker-Hannifin Corporation PH paid dividends worth $936 million to its shareholders in fiscal 2026 (ended June 2026). Parker-Hannifin also repurchased shares worth about $1 billion in the same fiscal year. In April 2026, Parker-Hannifin raised its quarterly dividend 11% to $2.00 per share.
HWM's Price Performance, Valuation and Estimates
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Shares of Howmet have gained 4.2% in the past six months against the industry’s decline of 6.7%.
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From a valuation standpoint, HWM is trading at a forward price-to-earnings ratio of 38.46X, above the industry’s average of 29.03X. Howmet carries a Value Score of F.
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The Zacks Consensus Estimate for both 2026 and 2027 earnings has increased 6.2% over the past 60 days.
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
