Lockheed Martin or RTX? The Dividend Difference Investors Shouldn’t Ignore
Lockheed Martin and RTX both raised full-year guidance on the same July morning, but their balance sheets and business mixes tell two very different stories about which dividend survives a budget freeze or a single bad program charge.
Lockheed Martin (NYSE:LMT | LMT Price Prediction) and RTX (NYSE:RTX) released second-quarter results on July 23, 2026, and both raised full-year guidance. Income investors need a narrower answer: which payout rests on steadier ground? Lockheed sells almost entirely to governments. RTX pairs Raytheon missiles with Pratt & Whitney engines and Collins avionics that depend on airline flying.
Missiles Lift Lockheed While Jet Engines Carry RTX
Lockheed’s quarter came down to weapons systems. Missiles and Fire Control sales rose 19% on PAC-3, THAAD and PrSM production increases. A $35 billion multi-year THAAD contract helped lift backlog to a record $230.42 billion, which gives the dividend years of visible work. F-35 deliveries were the weak spot, falling to 19 from 50.
RTX grew organic sales 16%. Pratt & Whitney’s commercial aftermarket rose 25%, a sign that airlines keep older fleets flying. Raytheon climbed 18% on Patriot, Standard Missile and AMRAAM. Backlog reached $289 billion, up 22%.
| Dividend Lens | Lockheed Martin | RTX |
|---|---|---|
| Quarterly dividend | $3.45 | $0.73 |
| Forward yield | 2.6% | 1.6% |
| Latest raise | 5% | 7.4% |
| 2025 dividends as share of FCF | 45% | 45% |
| 2026 FCF guidance | $7.0B to $7.2B | $8.50B to $8.75B |
Equal Coverage, Very Different Cushions
Both companies paid out about 45% of 2025 free cash flow as dividends. The balance sheets split apart from there. Lockheed carries $20.54 billion of debt against $8.77 billion of equity, and its debt has increased from $17.46 billion at the end of 2023. Over the same stretch, RTX cut debt from $45.24 billion to $38.86 billion.
Lockheed’s cash also has other demands on it. Management confirmed $8 billion to $9 billion of weapons systems investment and bought back no stock in the first half of 2026. CFO Evan Scott said Lockheed can “invest for growth and deliver tangible shareholder value at the same time.” RTX’s leadership listed “a commitment to the dividend” and debt reduction as standing priorities.
Lockheed has the longer record, with 23 consecutive years of increases. RTX adjusted its payout to $0.475 in 2020 after the Carrier and Otis spin-offs and has raised it every year since, at a faster recent pace.
Engine Inspections and Fixed-Price Charges Decide What Comes Next
I will be watching whether Pratt’s powder-metal GTF inspections and tariffs at Collins cut into RTX’s cash. On Lockheed, watch fixed-price programs. F-16 charges reached $125 million in Q1 2026, and management expects 20 to 30 basis points of near-term margin dilution in Missiles and Fire Control during the increases.
Why RTX Gets My Vote for Dividend Strength
Lockheed currently pays more today, and a 2.6% yield matters to retirees. I put safety first, though, and RTX wins there. Its payout draws on airlines, aftermarket service and defense customers at the same time, so a continuing resolution or a single program charge hits a smaller piece of revenue. Its debt is falling, and its raises are coming faster.
Lockheed’s dividend looks secure for now, backed by a record backlog. It still rests on a thinner balance sheet while cash goes into new factories. I would rethink my view if Lockheed’s debt starts shrinking, or if the GTF issue drives RTX’s free cash flow below its $8.50 billion guidance floor.
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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.
