Curtiss-Wright Corporation ( CW Quick Quote CW - Free Report) recently announced that its Board of Directors approved a hike in its quarterly dividend to 19 cents per share, reflecting an increase of 6% from the prior payout.
With the current hike, the company will now pay an annual dividend of 76 cents per share. This represents an annual dividend yield of 0.55% based on its share price worth as of May 12, more than the industry’s yield of 0.00% but lower than the Zacks S&P 500 composite’s yield of 1.50%.
Will Curtiss-Wright Sustain Dividend Hikes?
Curtiss-Wright’s emphasis on returning cash to shareholders is backed by a disciplined and balanced capital allocation strategy and is buoyed by its ability to deploy capital effectively. Since 2016, CW has been returning cash to shareholders through share repurchases and dividend hikes, thus highlighting consistency in returning excess cash to its shareholders.
In the first three months of 2022, the company used $19 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program. In November 2021, Curtiss-Wright announced a hike in its shares repurchase program by $100 million.
Such a solid distribution strategy is backed by its ability to generate strong revenues and free cash flows. Curtiss-Wright expects a surge of 3%-5% in total sales and projects 10% to 12% growth in earnings in 2022. Meanwhile, the company anticipates the free cash flow to increase in the range of 0%-5% in 2022.
Additionally, the company continues to maintain a healthy and balanced capital allocation strategy to support its top and bottom lines and expects to further accelerate it through strategic acquisitions of up to $1.6 billion. Backed by all these driving factors and its ability to deploy its capital effectively, Curtiss Wright is expected to duly maintain its liquidity position in the long haul, which would further assist in returning excess cash to its shareholders in the form of hiked dividends.
Returning cash to shareholders by hiking dividends is a common strategy adopted by several companies to show their financial strength. In this context, defense primes like Curtiss Wright who increased their dividend payouts to return excess cash to shareholders are:
In April 2022,
Raytheon Technologies ( RTX Quick Quote RTX - Free Report) announced a 7.8% hike over the prior quarter's dividend to 55 cents per outstanding share of Raytheon Technologies’ common stock.
RTX’s earnings improved by 27.8% in the first quarter from the year-ago quarter’s adjusted earnings of 90 cents. The company expects to generate free cash flow worth approximately $6 billion in 2022. Shares of Raytheon Technologies have returned 6.5% to its investors in the past year.
In March 2022,
General Dynamics ( GD Quick Quote GD - Free Report) announced an increase of 5.9% in its quarterly dividend to $1.26 per share and marked the 25th consecutive annual dividend increase.
General Dynamics’ quarterly earnings soared 5.2% from $2.48 per share in the year-ago quarter. As of Apr 3, 2022, General Dynamics’ cash and cash equivalents were $2,907 million compared with $1,603 million as of Dec 31, 2021. Shares of GD have rallied 16.4% in the past year.
In February 2022,
L3Harris Technologies ( LHX Quick Quote LHX - Free Report) announced a 10% increase in its quarterly cash dividend rate from $1.02 to $1.12.
L3Harris’ net cash inflow from operating activities amounted to $39 million at the end of the first quarter of 2022. LHX expects earnings in 2022 in the range of $13.35-$13.65 per share. Shares of L3Harris have appreciated 8.6% in the past year.
In the past year, shares of Curtiss-Wright have rallied 8.5% against the
industry’s decline of 26.7%. Image Source: Zacks Investment Research Zacks Rank
Curtiss-Wright currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .