LMT vs. RTX: Which Defense Dividend Actually Has the Staying Power?
Lockheed pays nearly double the yield, trades at a cheaper multiple, and holds 23 straight years of dividend increases. So why does the stronger dividend case belong to RTX?
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Lockheed Martin (NYSE:LMT | LMT Price Prediction) or RTX (NYSE:RTX): which defense dividend is the better buy right now? Lockheed pays an annualized $13.80 per share against RTX’s $2.92. That gap tells you almost nothing on its own, because Lockheed trades near $514.25 and RTX near $187.19. Yield, cash coverage and backlog quality are the fair measures, and they split this comparison.
Lockheed Wins Current Income by a Clear Margin
Lockheed’s quarterly dividend stands at $3.45, up from $3.30 before its latest raise. That works out to a yield of 2.63%, backed by 23 consecutive years of increases.
RTX pays $0.73 per quarter, up from $0.68, with trailing 12-month dividends of $2.82 and a yield of 1.46%. Management called the payout “a commitment to the dividend, for sure” on its July call. For income today, Lockheed wins.
RTX Has the Stronger Engine Funding Its Payout
Defense revenue follows a simple chain. Congress allocates money, the Pentagon awards contracts, and those awards sit in backlog before converting to sales over several years. The Department of War requested $1.45 trillion for fiscal 2027 versus $1.009 trillion enacted for fiscal 2026. That is a request, and Congress decides the final number.
Lockheed is nearly pure defense and concentrated in a few giant programs like the F-35. Its backlog hit a record $230.42B after a $35B THAAD interceptor contract. Execution is the weak spot. First-quarter operating cash flow fell to $220 million against $816 million in dividends, free cash flow was negative $291M, and 2025 carried $950M in classified program reach-forward losses.
RTX’s backlog reached $289B, up 22%, and 48% of Raytheon’s backlog is international. Its commercial arm cuts both ways. It means less reliance on Washington, but exposure to air travel cycles and the ongoing Pratt & Whitney powder metal inspections. Commercial aftermarket sales rose 18% last quarter. RTX guides 2026 free cash flow to $8.50B to $8.75B versus Lockheed’s $7.0B to $7.2B, while paying $3.574 billion in 2025 dividends to Lockheed’s $3.131 billion. RTX wins here, though investors pay for it: a forward P/E of 25 against Lockheed’s 16.
Lockheed Owns the Longer Continuous Record
RTX’s comparable dividend history begins in 2020, after the combination of Raytheon and United Technologies and the separation of Otis and Carrier. Per-share amounts from before that restructuring measure a different company, so any streak or growth rate spanning it would be misleading. Lockheed’s record as a single company runs longer, and its annual dividend spending grew from $2.347 billion in 2018 to $3.131 billion in 2025. RTX’s shorter window reflects corporate history rather than any wavering on the payout. On track record, Lockheed wins.
Verdict: RTX’s Dividend Is Better Built to Last
Lockheed takes two of three categories, yet RTX’s payout rests on stronger ground. It posted its 5th consecutive quarter beating consensus, expanded margins across all three divisions, and generates cash from two independent drivers. Lockheed’s cash flow swings hard with program charges, and F-35 deliveries fell to 19 from 50 year over year last quarter.
The split is clean. Lockheed wins for the retiree drawing income now who wants the higher yield at a cheaper multiple and accepts lumpier quarters. RTX wins for the investor at or near retirement. With a decade-long horizon, they prize a payout funded by broader, faster-growing cash flow.
This verdict could flip if Lockheed delivers a full year of free cash flow inside its $7.0B to $7.2B guidance with no new reach-forward charges. Both third-quarter earnings reports will offer that test.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
