An In-Depth Look at the Upcoming Dividend and the Company's Financial Health
Lockheed Martin Corp (NYSE:LMT) recently announced a dividend of $3.15 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-11-30. 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?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
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 Martin Corp's largest segment is aeronautics, which derives upward of two-thirds of its revenue from the F-35. Lockheed Martin Corp's remaining segments are rotary and mission systems, which is mainly 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, with dividends currently distributed on a quarterly basis. Lockheed Martin Corp has increased its dividend each year since 2000, earning it the status of a dividend achiever, a coveted designation for companies with at least 23 consecutive years of dividend increases. 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 2.64% and a 12-month forward dividend yield of 2.78%, 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 8.20%, extending to 8.90% over a five-year horizon. Over the past decade, the annual dividends per share growth rate stands at an impressive 10.50%.
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 4.04%.
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 2023-09-30, 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 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must exhibit robust growth metrics. Lockheed Martin Corp's growth rank of 9 out of 10 indicates a strong growth trajectory relative to competitors. The company's revenue per share and 3-year revenue growth rate show a robust revenue model, with an average annual increase of approximately 5.80%, outperforming about 60.15% of global competitors.
Lockheed Martin Corp's 3-year EPS growth rate demonstrates its ability to grow earnings, essential for maintaining dividends. Over the past three years, Lockheed Martin Corp's earnings have averaged an annual increase of approximately -0.40%, outperforming about 41.1% of global competitors. Additionally, the company's 5-year EBITDA growth rate of 21.80% outperforms approximately 73.02% of global competitors.
In conclusion, Lockheed Martin Corp's consistent dividend payments, robust dividend growth rate, moderate payout ratio, high profitability, and favorable growth metrics paint a promising picture for value investors. These factors collectively suggest that Lockheed Martin Corp is well-positioned to sustain its dividend payments and possibly continue its growth trajectory, making it an attractive option for those seeking reliable income streams. Investors interested in high-dividend yield opportunities may consider using the High Dividend Yield Screener available to GuruFocus Premium users for further research and investment decisions.
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.
This article first appeared on GuruFocus.