Lockheed Martin Corporation (LMT): What You Have To Know Before Buying For The Upcoming Dividend
Important news for shareholders and potential investors in Lockheed Martin Corporation (NYSE:LMT): The dividend payment of $2 per share will be distributed into shareholder on 29 December 2017, and the stock will begin trading ex-dividend at an earlier date, 30 November 2017. Is this future income a persuasive enough catalyst for investors to think about LMT as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. See our latest analysis for LMT
Here’s how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is it paying an annual yield above 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has it increased its dividend per share amount over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it be able to continue to payout at the current rate in the future?
How does Lockheed Martin fare?
The company currently pays out 58.43% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 47.56%, leading to a dividend yield of 2.57%. However, EPS should increase to $13.41, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of LMT it has increased its DPS from $1.68 to $8 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. Compared to its peers, LMT has a yield of 2.54%, which is high for aerospace and defense stocks but still below the market’s top dividend payers.
What this means for you:
Are you a shareholder? Investors of Lockheed Martin can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, LMT is one worth keeping around in your income portfolio. But, depending on your current holdings, it may be valuable exploring other income stocks to increase diversification, or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? With these dividend metrics in mind, I definitely rank Lockheed Martin as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. No matter how much of a cash cow Lockheed Martin is, it is not worth an infinite price. Is LMT still a bargain? Dig deeper in our latest free analysis to find out!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
