NYSE:LMT) is about to trade ex-dividend in the next 4 days. Investors can purchase shares before the 31st of August in order to be eligible for this dividend, which will be paid on the 25th of September.” data-reactid=”28″ type=”text”>Lockheed Martin Corporation (NYSE:LMT) is about to trade ex-dividend in the next 4 days. Investors can purchase shares before the 31st of August in order to be eligible for this dividend, which will be paid on the 25th of September.
Lockheed Martin’s next dividend payment will be US$2.40 per share, and in the last 12 months, the company paid a total of US$9.60 per share. Looking at the last 12 months of distributions, Lockheed Martin has a trailing yield of approximately 2.4% on its current stock price of $394.84. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That’s why it’s good to see Lockheed Martin paying out a modest 41% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It distributed 39% of its free cash flow as dividends, a comfortable payout level for most companies.
It’s encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don’t drop precipitously.
here to see the company’s payout ratio, plus analyst estimates of its future dividends.” data-reactid=”37″ type=”text”>Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we’re glad to see Lockheed Martin’s earnings per share have risen 17% per annum over the last five years. Earnings per share have been growing rapidly and the company is retaining a majority of its earnings within the business. This will make it easier to fund future growth efforts and we think this is an attractive combination – plus the dividend can always be increased later.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Lockheed Martin has lifted its dividend by approximately 14% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
Has Lockheed Martin got what it takes to maintain its dividend payments? We love that Lockheed Martin is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. These characteristics suggest the company is reinvesting in growing its business, while the conservative payout ratio also implies a reduced risk of the dividend being cut in the future. It’s a promising combination that should mark this company worthy of closer attention.
1 warning sign for Lockheed Martin that you should be aware of before investing in their shares.” data-reactid=”55″ type=”text”>On that note, you’ll want to research what risks Lockheed Martin is facing. To help with this, we’ve discovered 1 warning sign for Lockheed Martin that you should be aware of before investing in their shares.
a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.” data-reactid=”60″ type=”text”>We wouldn’t recommend just buying the first dividend stock you see, though. Here’s a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.