Exploring the Sustainability and Growth of Lockheed Martin's Dividends
Lockheed Martin Corp (LMT, Financial) recently announced a dividend of $3.15 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-03. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Lockheed Martin Corp's dividend performance and assess its sustainability.
What Does Lockheed Martin Corp Do?
Lockheed Martin is the world's largest defense contractor and has dominated the Western market for high-end fighter aircraft since it won the F-35 Joint Strike Fighter program in 2001. Lockheed's largest segment is aeronautics, which derives upward of two-thirds of its revenue from the F-35. Lockheed's remaining segments are rotary and mission systems, mainly encompassing the Sikorsky helicopter business; missiles and fire control, which creates missiles and missile defense systems; and space systems, which produces satellites and receives equity income from the United Launch Alliance joint venture.
A Glimpse at Lockheed Martin Corp's Dividend History
Lockheed Martin Corp has maintained a consistent dividend payment record since 1995. Dividends are currently distributed on a quarterly basis. Lockheed Martin Corp has increased its dividend each year since 2000. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 24 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Lockheed Martin Corp's Dividend Yield and Growth
As of today, Lockheed Martin Corp currently has a 12-month trailing dividend yield of 2.62% and a 12-month forward dividend yield of 2.68%, suggesting an expectation of increased dividend payments over the next 12 months.
Over the past three years, Lockheed Martin Corp's annual dividend growth rate was 7.40%. Extended to a five-year horizon, this rate increased to 8.20% per year. And over the past decade, Lockheed Martin Corp's annual dividends per share growth rate stands at 9.70%.
Based on Lockheed Martin Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Lockheed Martin Corp stock as of today is approximately 3.89%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Lockheed Martin Corp's dividend payout ratio is 0.44.
Lockheed Martin Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Lockheed Martin Corp's profitability 9 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Lockheed Martin Corp's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Lockheed Martin Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Lockheed Martin Corp's revenue has increased by approximately 5.00% per year on average, a rate that underperforms than approximately 60.42% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Lockheed Martin Corp's earnings increased by approximately 4.00% per year on average, a rate that underperforms than approximately 56.25% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.30%, which underperforms than approximately 48.51% of global competitors.
Conclusion: Assessing Lockheed Martin Corp's Dividend Prospects
Considering Lockheed Martin Corp's consistent dividend growth, robust payout ratio, and solid profitability, the company's dividend appears sustainable in the near term. However, investors should keep an eye on the company's growth metrics, which, while solid, show some areas of underperformance compared to industry peers. For those looking to expand their portfolio with high-dividend yield stocks, GuruFocus Premium offers tools like the High Dividend Yield Screener to discover similar investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
