Huntington Ingalls Industries: A Look at Rising Dividend Yields
On Thursday, shares of Huntington Ingalls Industries, Inc. (Symbol: HII) offered a dividend yield exceeding 3% based on its quarterly dividend, which annualizes to $5.4. The stock traded as low as $159.01 during the day. Dividends matter significantly for investors, as they have historically contributed a substantial portion of total stock market returns.
For context, consider an investment in the S&P 500 ETF (SPY) on December 31, 1999. The purchase price was $146.88 per share. By December 31, 2012, the share price had dropped to $142.41, representing a loss of $4.67 over those years. However, over the same timeframe, investors received $25.98 per share in dividends, resulting in a total positive return of 23.36%. Despite the potential for reinvested dividends to boost average returns, the annual total return sat at just 1.6%. Thus, a sustainable yield above 3% appears quite appealing in comparison. As a member of the S&P 500, Huntington Ingalls Industries, Inc. enjoys the privileges associated with being one of the leading large-cap companies in the index.
Dividend payments can be unpredictable and often mirror a company’s profitability fluctuations. Examining the dividend history chart for Huntington Ingalls Industries below may offer insight into whether the current dividend is likely to be maintained, and if a 3% annual yield is a reasonable expectation.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
