The Latest: A 1.8% Dividend Delight
L3Harris Technologies LHX pleasantly surprised its shareholders with news of a 1.8% increase in their quarterly dividend payout. Come March 22, 2024, investors will receive $1.16 per share, a positive nod from the board of directors. This boost further solidifies L3Harris’ reputation as a reliable dividend payer, having increased payouts for 23 consecutive years.
With the revised annualized dividend rate now at $4.64 per share, L3Harris offers an annualized dividend yield of 2.19%, outshining the Zacks S&P 500 composite yield of 1.32%, all based on a share price of $211.74 as of Feb 27, 2024.
The Trail of Triumph: Decades of Distributions
The roots of increased dividends at L3Harris run deep, intertwined with its robust performance and cash generation. By the end of 2023, the company boasted $560 million in cash and cash equivalents, buttressing a steady cash flow. Bolstered by their 2023 operating activities raking in $2.10 billion, the company stands firm on a foundation set to bear more fruit in the coming years.
L3Harris’ deliberate investments pave the way for a flourishing future. By keeping around 2% of revenues reserved for capital expenditure, the company secures the path for long-term cash flows. Notably, the recent acquisitions of Tactical Data Links and Aerojet Rocketdyne lend L3Harris a stronger national security portfolio and a hefty long-cycle backlog. These strategic moves promise positive synergies that will amplify future operational results, propelling further dividend increments.
Targeting a payout between 35-40% of free cash flow, L3Harris doubles down on their commitment to financial strength. With sound earnings and a knack for magnified dividend payouts, this aerospace giant is poised for sustained growth in shareholder rewards.
In Good Company: Comparing Dividend Histories
L3Harris dances to a familiar tune in the aerospace-defense industry, where consistent dividend payments echo across the board. The likes of RTX Corporation RTX, Lockheed Martin LMT, and General Dynamics GD join the dividend crescendo with their own impressive track records.
RTX boasts a 7.3% increase in dividends, while LMT and GD trail closely with 5% and 4.8% growth, respectively. Each of these companies reveals dividends rates and yields that are noteworthy, especially when compared to the Zacks S&P 500 composite.
The Zacks Rank Sitrep
Receiving a Zacks Rank #3 (Hold), LHX stands poised on the cusp of potential growth. For a detailed insight on strong buys, a quick peek at today’s Zacks #1 Rank stocks can shed more light on the horizon.
The Price Poetry: Performances in Perspective
While the industry swirls in the tempest of change, LHX stands resilient with a 0.8% rally in share price over the past year, eclipsing the industry’s 9.2% decline. This steadfast performance underscores the company’s stability amidst shifting tides.
Image Source: Zacks Investment Research
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Please note that the views and opinions expressed herein are the author’s and do not necessarily reflect those of Nasdaq, Inc.
