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Raytheon (RTN) Approves 9% Increase in Quarterly Dividend
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The board of directors of Raytheon Co. voted for an 8.9% annual dividend hike. This marked the 13th consecutive annual dividend increase by the company.
The company has increased the quarterly dividend to 79.75 cents per share from 73.25 cents, bringing the annualized payout to $3.19 from $2.93 paid earlier. The annual yield on distribution is 2.1%. The dividend will be paid on May 11, to shareholders of record as of Apr 12.
Raytheon’s Financials
A steady dividend payout policy primarily reflects Raytheon’s robust financial position and balanced capital deployment strategy. In fact, an increase in dividend at periodic intervals has been one of the most attractive features of this defense major, providing risk-adjusted returns to its stockholders. The latest rise comes almost after a year of its prior dividend increase declared on Mar 2016.
Raytheon ended 2016 with operating cash flow from continuing operations of $1.1 billion, reflecting an increase of 40.3% year over year. Full-year earnings per share, or EPS, were $7.55, 11.7% higher from $6.76 recorded in the prior year.
Our View
Raytheon has been a consistent performer over the years, which is driving its share price and a quick peek into its recent earnings history reveals the same. Encouragingly, the company surpassed the Zacks Consensus Estimate in all of the four trailing quarters, with an average positive earnings surprise of 4.58%. The long-term earnings growth rate of the company is pegged at 7.50%.
As the world’s largest missile maker, Raytheon experienced healthy demand for its products, particularly from foreign customers. The company has been seeing continuous growth in its international sales for the past few years. International bookings comprised 38% of total fourth-quarter 2016 bookings. Also during the quarter, its international sales were up 5.6%, representing 31% of total sales. Notably, rising demand from MENA or the Middle East and North Africa region will likely be the company’s key revenue driver, going ahead.
However, the company’s bookings in the fourth quarter were $7,577 million compared with $7,861 million in the year-ago quarter, reflecting a decrease of 3.6%. Total backlog at the end of the quarter was $36.9 billion, up from $34.7 billion at 2015-end.
Thanks to Raytheon’s wide range of combat-proven defense products, the company continues to receive scrumptious orders from both Pentagon as well as foreign allies of the nation.
Price Movement
Raytheon’s stock has gained about 23.9% in the last twelve months, outperforming the Zacks categorized Aerospace-Defense Equipment industry’s gain of 19.5%. This could be because Raytheon is one of the best-positioned large-cap defense players due to its non-platform-centric focus. Rising demand from the Middle East and North Africa region, and growth in FMS contracts added to the positives. The company also poses strong competition to its peers including Ducommun Incorporated (DCO - Free Report) , Curtiss-Wright Corporation (CW - Free Report) and Aerojet Rocketdyne Holdings, Inc. .
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Raytheon (RTN) Approves 9% Increase in Quarterly Dividend
The board of directors of Raytheon Co. voted for an 8.9% annual dividend hike. This marked the 13th consecutive annual dividend increase by the company.
The company has increased the quarterly dividend to 79.75 cents per share from 73.25 cents, bringing the annualized payout to $3.19 from $2.93 paid earlier. The annual yield on distribution is 2.1%. The dividend will be paid on May 11, to shareholders of record as of Apr 12.
Raytheon’s Financials
A steady dividend payout policy primarily reflects Raytheon’s robust financial position and balanced capital deployment strategy. In fact, an increase in dividend at periodic intervals has been one of the most attractive features of this defense major, providing risk-adjusted returns to its stockholders. The latest rise comes almost after a year of its prior dividend increase declared on Mar 2016.
Raytheon ended 2016 with operating cash flow from continuing operations of $1.1 billion, reflecting an increase of 40.3% year over year. Full-year earnings per share, or EPS, were $7.55, 11.7% higher from $6.76 recorded in the prior year.
Our View
Raytheon has been a consistent performer over the years, which is driving its share price and a quick peek into its recent earnings history reveals the same. Encouragingly, the company surpassed the Zacks Consensus Estimate in all of the four trailing quarters, with an average positive earnings surprise of 4.58%. The long-term earnings growth rate of the company is pegged at 7.50%.
As the world’s largest missile maker, Raytheon experienced healthy demand for its products, particularly from foreign customers. The company has been seeing continuous growth in its international sales for the past few years. International bookings comprised 38% of total fourth-quarter 2016 bookings. Also during the quarter, its international sales were up 5.6%, representing 31% of total sales. Notably, rising demand from MENA or the Middle East and North Africa region will likely be the company’s key revenue driver, going ahead.
However, the company’s bookings in the fourth quarter were $7,577 million compared with $7,861 million in the year-ago quarter, reflecting a decrease of 3.6%. Total backlog at the end of the quarter was $36.9 billion, up from $34.7 billion at 2015-end.
Thanks to Raytheon’s wide range of combat-proven defense products, the company continues to receive scrumptious orders from both Pentagon as well as foreign allies of the nation.
Price Movement
Raytheon’s stock has gained about 23.9% in the last twelve months, outperforming the Zacks categorized Aerospace-Defense Equipment industry’s gain of 19.5%. This could be because Raytheon is one of the best-positioned large-cap defense players due to its non-platform-centric focus. Rising demand from the Middle East and North Africa region, and growth in FMS contracts added to the positives. The company also poses strong competition to its peers including Ducommun Incorporated (DCO - Free Report) , Curtiss-Wright Corporation (CW - Free Report) and Aerojet Rocketdyne Holdings, Inc. .
Zacks Rank
Raytheon currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>