A Comprehensive Analysis of LMT's Dividend History, Yield, Growth Rates, and Sustainability
Lockheed Martin Corp (LMT, Financial) recently announced a dividend of $3 per share, payable on 2023-09-22, with the ex-dividend date set for 2023-08-31. 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 deep dive into Lockheed Martin Corps dividend performance and assess its sustainability.
Lockheed Martin Corp: An Overview
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 upwards of two thirds of its revenue from the F-35. Lockheed'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 Look at Lockheed Martin Corp's Dividend History
Lockheed Martin Corp's dividend history showcases a firm commitment to rewarding shareholders. The company's Dividends Per Share has seen consistent increments over the years, indicating a solid dividend distribution approach. 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 23 years.
Understanding Lockheed Martin Corp's Dividend Yield and Growth
Dividend growth rates, both on a 3-year and 5-year basis, further shed light on the company's proclivity to increase shareholder returns. The 3-year dividend growth rate and the 5-year dividend growth rate both reveal a pattern of consistent and robust growth. Lockheed Martin Corp's dividend has changed by 8.20% per year on average over the past three years, which outperforms approximately 59.52% of global competitors. During the past five years, the company's dividend has increased by approximately 8.90% per year on average. 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 4.00% per year.
Is Lockheed Martin Corp's Dividend Sustainable?
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 2023-06-30, Lockheed Martin Corp's dividend payout ratio is 0.43.
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 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability. Additionally, the predictability rank of 4 stars out of 5 suggests that revenue and earnings growth of Lockheed Martin Corp is fairly consistent.
Lockheed Martin Corp's Growth Metrics and 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 5.80% per year on average, a rate that outperforms than approximately 62.84% 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 -0.40% per year on average, a rate that outperforms than approximately 40.95% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 21.80%, which outperforms than approximately 70.25% of global competitors.
Conclusion
In conclusion, Lockheed Martin Corp's consistent dividend payments, robust dividend growth rate, and sustainable payout ratio, combined with its excellent profitability and promising growth metrics, make it a compelling prospect for dividend-focused investors. However, investors should continue to monitor Lockheed Martin Corp's performance to ensure its dividends remain sustainable in the long run. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
