Citizens Financial Leads 3 Dividend Raises With a 13% Payout Boost
Three companies just backed their dividend raises with earnings that tell a more interesting story than the payout increases alone, and one bank CEO is publicly calling his own stock cheap while handing shareholders a double-digit boost.
A dividend raise shows a board putting cash behind its forecast, and three very different companies did exactly that, backed by strong third-quarter results. Lockheed Martin (NYSE:LMT | LMT Price Prediction), the defense contractor, extended a decades-long run of increases. Gorman-Rupp (NYSE:GRC), the Ohio pump maker, lifted its payout after a record quarter. The biggest jump came from Citizens Financial Group (NYSE:CFG), which raised its quarterly dividend by 13%. Each company’s starting yield differs, but all three back their raises with earnings that comfortably cover the payout.
Lockheed Martin: A 24th Straight Raise Backed by Record Cash Flow
Lockheed Martin used its third-quarter report to announce another dividend increase. The company’s chief executive linked the raise directly to results: “We delivered $3 billion of free cash flow in the quarter, and increased our backlog to a record $292 billion, allowing us to raise our dividend for the 24th year in a row.” A year earlier, Lockheed cited 23 consecutive years of dividend increases when it raised the quarterly payment from $3.30 to $3.45 per share. The new quarterly amount was not available at publication. Lockheed plans to pay shareholders on 2026-12-31, with an ex-dividend date of 2026-12-01.
Based on the $3.45 quarterly rate and a recent price of $630.22, the stock yields about 2.19%. Once the higher payment starts, that figure will rise slightly.
Dividend Safety
Coverage is solid. The $13.80 annual dividend uses about 49% of trailing diluted EPS of $28.16. Cash coverage looks even better. Third-quarter free cash flow of $2.999 billion was about 3.68 times the $816 million Lockheed paid in dividends in the first quarter. Management also raised its full-year free cash flow outlook to $7,800 million to $8,000 million, up from $7,000 million to $7,200 million. Cash reached $5.96 billion, up 71.76% from the prior year.
Bull Case
Lockheed’s backlog stands at a record $292B, up 27% from the prior quarter. That total includes a $52.5B multi-year PAC-3 MSE missile award. Missiles and Fire Control sales rose 24%, and full-year EPS guidance rose for the second quarter running to $30.35 to $30.75. The stock trades at about 18 times forward earnings and has gained 32.67% year to date.
Risk
Lockheed said F-35 Lot 20 costs have started running above current contract authorization. Without more U.S. government funding, that could negatively impact future results.
Citizens Financial Group: A Double-Digit Raise Plus Bigger Buybacks
Citizens raised its quarterly dividend from $0.46 to $0.52 per share, declared on 2026-10-13. Shareholders of record on 2026-10-30 will be paid on 2026-11-13. At the new rate and a price of $65.37, the forward yield is about 3.18%, the highest of the three.
Dividend Safety
For a bank, earnings and capital matter more than free cash flow. On both counts, Citizens has room. The new annualized payout is about 45% of trailing EPS of $4.59. Third-quarter EPS of $1.41 means the $0.52 dividend uses only about 37% of one quarter’s earnings. CET1, the core regulatory capital ratio, ended the quarter at 10.5%. Citizens returned $322 million to shareholders in the quarter: $197 million in dividends and $125 million in buybacks. The chief financial officer said the bank generates “more than 30 basis points of capital every quarter through our net-income generation.”
The longer record is mixed but positive. The quarterly dividend has risen from $0.10 in 2014 to $0.52 today. It did, however, stay flat at $0.42 from late 2022 through mid-2025, so raises here are not automatic.
Bull Case
Net interest income rose 13% year over year, and net interest margin expanded to 3.19%. Return on tangible common equity (ROTCE) improved to 15.08%, and net charge-offs dropped to 37 bps. Management is aiming for ROTCE of 16% to 18% by the end of 2027 and has expanded the buyback authorization to $1.95 billion. Chief executive Bruce Van Saun said on the earnings call, “I think the stock is cheap.” At about 10 times forward earnings and 1.169 times book value, those multiples support that view.
Risk
Tangible book value per share fell 6.6% from the prior quarter as rate moves hit accumulated other comprehensive income (AOCI), the unrealized losses on the bank’s bond holdings. The general office loan book also has an expected loss rate of about 19%.
Gorman-Rupp: Record Earnings and a Fast-Shrinking Debt Load
Gorman-Rupp raised its quarterly dividend from $ 0.19 to $0.20 per share on 2026-10-23, an increase of about 5.26%. The ex-dividend date is 2026-11-13, and payment follows on 2026-12-10. At $75, the forward yield is about 1.07%. That positions Gorman-Rupp as the dividend-growth story of the group, with modest current income.
Dividend Safety
This payout is the best covered of the three. The new annualized dividend takes about 29% of trailing EPS of $2.80. Gorman-Rupp paid down $58M of debt in the first nine months of the year, which cut quarterly interest expense to $4.32M from $5.79M. Cash rose to $59.3M, and total liabilities fell 10.14% from the prior year. The quarterly rate has climbed from $0.09 in 2014 to 20 cents today, rising every year since 2020.
Bull Case
Adjusted EPS of $0.86 beat the $0.70 estimate, and net sales grew 11.8% to $193.25M. Gross margin expanded 420 bps to 33.4%. Growth came from many end markets, including agriculture, fire suppression, and industrial customers linked to data centers. The company enters the fourth quarter with a $236.8M backlog. Chief executive Scott A. King called it the “third consecutive quarter with record earnings per share.” Investors have already noted: the stock is up 58.29% year to date and trades at about 24 times forward earnings.
Risk
U.S. trade policy and tariffs on raw materials could squeeze margins. In addition, the company’s LIFO inventory accounting can make quarterly earnings swing more than the underlying business does.
Three Raises Built on Earnings Growth
Each increase follows faster earnings growth. Lockheed backs a decades-long streak with a record backlog and higher free cash flow guidance. Citizens offers the highest forward yield and pairs it with a larger buyback. Gorman-Rupp has the lowest payout ratio and a shrinking debt load, which leaves the most room for future raises. All three keep their payout ratios under half of trailing earnings, so each has room to keep raising. For income investors trying to work raises like these into a portfolio that pays the bills without selling shares, we laid out the full ladder approach in a free guide here.
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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.
