Lockheed Martin (NYSE: LMT) has just joined the dividend hike brigade. We have previously written that this would likely be the case and the hike was right in line with the upper-end of our own expectations.
Lockheed’s board of directors has now just announced this Thursday that it has authorized a fourth quarter 2012 dividend of $1.15 per share. The hike is by $0.15 or 15%. With the coming defense cuts under the fiscal cliff, this is a situation that many defense firms and many investors are watching closely. The company confirmed that this announcement marked the tenth consecutive annual dividend increase, and said that it was the tenth double-digit percentage increase.
A month ago we predicted 12 major dividend hikes before the end of 2012, several of which have already been announced. Lockheed Martin was one of those stocks and we noted:
Lockheed Martin may be in the defense sector and at risk of austerity measures, but its dividend hike of late 2011 was for a yield of 5.2%. That only screens out as about 4.4% now that shares hit a new 52-week high. In the new age of austerity, the $30 billion defense giant might not be able to take the same 33% dividend hike it took in late 2011, but it is still expected to grow earnings, and that $1.00 quarterly payment may get hiked to $1.10 or $1.15 in the next 45 to 60 days.
As far as what the annualized payout of $4.60 means with a $91.80 share price, the old dividend yield of close to 4.4% will now yield 5% to new investors. It is also worth noting that $91.80 share price compares to a 52-week range of $70.37 to $93.99.
Lockheed is blowing away its defense contractor peers on the dividend yields. Here is a list of dividend yields as follows:
Rockwell Collins Inc. (NYSE: COL) at 2.3%
L-3 Communications Holdings In (NYSE: LLL) at 2.8%
General Dynamics Corp. (NYSE: GD) at 3.1%
Northrop Grumman Corporation (NYSE: NOC) at 3.3%
Raytheon Co. (NYSE: RTN) at 3.4%
JON C. OGG