2021 will bring the best economic growth in 20 years. We feel that growth is likely to moderate going forward. The Bottom Line. And, United Technologies also closed on its $30 billion purchase of Rockwell Collins on 11/26/2018. Aerospace sales were higher by 2% due to increased volumes for manned aircraft and space programs. Shares of QUALCOMM, ResMed, Starbucks, Texas Instruments, and UnitedHealth represent a potential buying opportunity for the long-term … Given these investors defensive stance, one might ask how about some real defense stocks, as in the Aerospace and Defense … You can view all 57 Dividend Aristocrats here. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders. Using the midpoint of guidance for the year of $11.88, the stock has a current P/E ratio of 16. Volumes for the F-35, F/A-18 and F-16 programs were all higher year-over-year. Consistent with this, General Dynamics raised its dividend 9.7% for the May 2019 payment. This qualifies the company as a Dividend Aristocrat. Organic sales grew 6% for the quarter. As 2020 began, it looked as if the long era of rock-bottom rates might finally come to an end. Source: Second Quarter Results Presentation, slide 2. The stock currently offers a 2.2% yield. Raytheon, after increasing its dividend 8.7% for the 5/9/2019 payment, has now increased its dividend for 15 years in a row. This increase was slightly over the five-year average annual raise of 8.4%. The combined entity is now the sixth largest defense contractor in the world. Bell Helicopter dropped 7.2% on lower military sales. In this article we presented our list of the 10 best dividend stocks under $20. A higher effective income tax rate compared to the second quarter of 2018 also factored in the EPS decline. Meanwhile, Intelligence, Information & Services saw a 5% increase in sales, mostly due to higher volumes of classified programs in the areas of cyber and space. General Dynamics operates four business divisions: Aerospace, which produces the high-end Gulf Stream private jet; Combat Systems, which makes combat vehicles like the Abrams battle tank; Information Systems & Technology, which provides fire-control systems for ships as well as programs for cyber security; Marine Systems, which manufacturers ships and submarines for the Navy; and Mission Systems, which produces programs used in Space, Intelligence and Cyber Systems. In addition to dividends, Northrop Grumman has returned a tremendous amount of capital to shareholders in the form of stock buybacks. Combat systems had revenue growth of 8.1% due to higher than expected growth in the M-1 Abrams tank production. Using the midpoint for earnings guidance, this equates to a payout ratio of just 42%. High quality dividend paying stocks provide both dividend income, and the potential for stock price growth. 2. The company has increased its dividend with a compound annual growth rate of 11.6% over the past five years. PPA has dramatically underperformed the broader market. The share count was 41.7 million at the end of the most recent quarter, down from 49.4 million shares in 2011. These are the defense stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Shares yield 2.1% at the moment. Missile Systems revenue increased 8%, and Space & Airborne Systems grew 13% due to improvements in demand for classified, infrared and radar programs. Based on of expected earnings-per-share for 2019, the payout ratio is less than 24%. General Dynamics has a current market cap of $55 billion and produced more than $36 billion in sales last year. Maxar Technologies Inc. "Maxar Technologies Reports Third Quarter 2020 Results." Shares yield 2.3%, giving Lockheed Martin the highest yield on this list. The annualized dividend of $5.28 represents a payout ratio of just 27% of the midpoint for expected earnings-per-share for 2019. Integrated Defense Systems had sales growth of 8% for the quarter. The total estimated contract value rose 7.2% to $26.8 billion for this division. We rate shares of Northrop Grumman as a hold, but would be more interested in the stock if it were to pullback. Raytheon Company is composed of five business units: Integrated Defense Systems, which manufactures missile defense products; Intelligence & Information Systems, which provide services, training, engineering and logistics; Missile Systems, which produces munitions and missiles; Space & Airborne Systems, which provides airborne radars and sensors; and Forcepoint, a cyber security business. The Aerospace & Defense ETF (ITA) has returned more than 31% year-to-date and more than 105% over the past five years. Click here to download your Defense Stocks Excel Spreadsheet List now, Estimated Total Annual Return through 2024: 2.7%, Estimated Total Annual Return through 2024: 5.2%, Estimated Total Annual Return through 2024: 5.6%, Estimated Total Annual Return through 2024: 5.7%, Estimated Total Annual Return through 2024: 7.2%, Estimated Total Annual Return through 2024: 7.6%, Estimated Total Annual Return through 2024: 13.2%. As passive income plays a key role in asset … This has caused many stocks in this sector to reach valuations well above their historical average. Dividend … But the deal is not yet official and still needs final regulatory approval. Created when Lockheed Corporation and Martin Marietta merged in 1995, Lockheed Martin is the world’s largest defense contractor. A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is overseen by a professional money manager. While we are impressed by the company’s dividend growth track record, the mid-single digits projected growth earns shares of General Dynamics a hold recommendation. Investing in companies in this sector has been a big win for shareholders. Missiles and Fire Control operations create missile defense systems, while the Space Systems segment produces satellites. These are the best dividend stocks for 2021. Defense stocks are best represented by the Invesco Aerospace & Defense ETF (PPA), although the fund targets both the defense and aerospace industries. Northrop Grumman offered revised guidance for the year and now expects earnings-per-share in a range of $19.30 to $19.55 in 2019. Revenue was higher by 4% to $9.6 billion. The most trusted of all are the famous Dividend Aristocrats, which are a few dozen high-profile stocks on the S&P 500 that have increased their dividends every year for at least … Click to skip ahead and see the 5 Best Dividend Stocks Under $20. The company was spun off in March of that year. We rate Textron shares as a buy. We also reference original research from other reputable publishers where appropriate. The company earned $3.07 per share, which was $0.48 below estimates and a 43% drop from the prior year. We’ve used the TipRanks Stock Screener to pull up dividend stocks yielding 20% or more, with a Strong Buy consensus rating and over 30% upside potential. Textron reported second quarter earnings results on 7/17/2019. Lockheed Martin expects to generate EPS in a range of $20.85 and $21.15 for the year. Axon Enterprise Inc. "Axon Reports Q3 2020 Revenue Growth of 27%, ARR Tops $200 million, Up 44%." Textron’s earnings-per-share totaled $0.93 in the quarter, $0.07 above consensus estimates and a 7% improvement from the second quarter of 2018. Thanks for reading this article. Up until 2011, Huntington Ingalls Industries was a division within Northrop Grumman. The annualized dividend of $2.94 represents a payout ratio of 37% of expected earnings for 2018. Lastly, accounting for divestitures, Industrial sales were lower by 8.4% to decreased volumes. If the stock were to revert to this average by 2024, the corresponding multiple contraction would be a 1.4% headwind to total annual returns. Lower revenues in the Legend-class cutter program and amphibious assault ships were the reasons for this weakness. It was announced on 6/9/2019 that the remaining United Technologies businesses would merge with fellow aerospace and defense company Raytheon Company. Following second quarter results, United Technologies issued updated guidance. Using expected earnings-per-share for the year, the payout ratio is just 2.1%. Earnings declined during the last recession and it took the company until 2011 to make a new high. The stock trades with a market capitalization of $109 billion. The company has a current market capitalization of $9 billion today. This is above our target P/E ratio of 16. Through efficiency, operating margins increased 120 bps to 10.5% and the company spent $159 million on share repurchases during the quarter. While the company’s expected growth rate is tied for the highest on this list, we find that the stock’s valuation has gotten ahead of itself. General Dynamics was also awarded two large contracts during the quarter. They also offer cyber security, information technology (IT), analytics, robotics, and intelligence systems. In 1994, Northrop purchased Grumman Corporation, which provided the Lunar Module that landed on the moon in 1969. Huntington Ingalls has a stock price of $218. The majority (10%) was due to organic sales declines. Lockheed Martin reported second quarter earnings results on 7/23/2019. Textron, Inc. The company had nearly $54 billion in sales in 2018, with the U.S. Department of Defense contributing 60% of this total. Earnings-per-share grew 12.4% year-over-year to $5.06. Source: Second Quarter Earnings Release Presentation, slide 4. Raytheon’s expected total annual returns would be made up of the following: If the RTN-UTX merger does not succeed, we believe Raytheon as an independent stock would return 5.2% per year over the next five years. Unlike the other names on this list, Textron has not increased its dividend in quite some time. We maintain our hold recommendation on shares of L3Harris. Using the current share price of $138 and expected earnings-per-share of $7.98, the stock trades with a P/E ratio of 17.3. The Electronic Systems segment had 14% growth, as all three businesses saw increase in demand. Grocery retailers are still strong targets in the event of a stock … The company also received a $270 million award for missile compartment work under joint development with the U.K. Royal Navy. Rotary and Mission Systems had sales growth of 6% on higher demand for integrated warfare systems and sensors programs. Northrop Grumman was founded as Northrop Aircraft in 1939. Aerospace includes manned aircraft such as the F-35 and B-2 as well as unmanned aircraft such as the Global Hawk. Lockheed Martin consists of four divisions. We rank these 8 companies by our expected total annual return estimate over the next five years, which is a combination of future earnings-per-share growth, current dividend yield , and the impact of multiple expansion or contraction. Communication Systems tactical orders grew 23% due to strength in both U.S. and international demand for modernized products. Source: Second Quarter Results Presentation, slide 1. Northrop Grumman released second quarter earnings results on 7/24/2019. Accessed Dec. 7, 2020. Accessed Dec. 7, 2020. The company raised its dividend at an annual rate of 9.5% from 2009 through 2018. If you’re interested in buying stocks with increasing dividends that are poised for long-term growth, you’ll love this list of the 50 highest dividend paying stocks … The company’s products continue to perform well, but we feel that the expected return isn’t enough to justify a buy recommendation at this time. Some defense companies have experienced delays and disruptions due to the impact of the COVID-19 pandemic. Dividend Aristocrats are a group of 57 stocks in the S&P 500 Index, with 25+ consecutive years of dividend growth. With its healthcare-focused defensive portfolio of real estate, NorthWest Healthcare Properties REIT (TSX:NWH.UN) is another top stock under $30 to earn a steady dividend … The first was a $495 million contract for a Columbia-class development and industrial base from the U.S. government. Stocks with higher one … The company reduced its share count at an annual rate of 5.7% from 2009 through 2018. There is at least a chance that the deal will not be completed, and therefore we are including the stock in this list in the event the merger does not go through. Marine Systems sales grew 7.2%. The decline in earnings was due to lower segment operating income and an unfavorable change in a non-operating retirement benefit. After the announced spin-offs are completed, the company will be composed of two segments: Pratt & Whitney, which manufactures and services engines for commercial and military customers, and Collins Aerospace Systems, which creates aerospace and industrial products. The company increased its dividend 9.5% for the September 2019 payment. A defensive stock is one that provides a consistent dividend and stable earnings regardless of the state of the overall stock market or economy. The combined company will have net debt of $26 billion, with the legacy United Technologies business contributing approximately $24 billion. While the sector could continue to perform well, we encourage investors to wait for a pullback in several of the stocks discussed in this article due to valuation concerns. We feel that a P/E ratio of 17 is a more appropriate target. Please send any feedback, corrections, or questions to support@suredividend.com. The majority of L3Harris’ sales come from the U.S. government and other defense contractors. The company earned $2.20 per share, topping estimates by $0.15 and growing nearly 11.7% from the prior year’s second quarter. We feel that the Orbital ATK acquisition was an excellent addition to the company. The average P/E since 2012 is slightly more than 14. Is there more room for these stocks to run going forward? The company earned $2.77 per share, $0.06 higher than expected and a 5.7% increase from the previous year. Revenue grew 18.8% to $8.5 billion, which was $40 million above estimates. This article will look at the top 8 stocks in the aerospace and defense sector according to the Sure Analysis Research Database. This segment saw higher revenues due to increased volumes for aircraft carriers and naval nuclear support services which were offset by lower submarine revenues. Following a 5% dividend increase for the payment made 12/10/2018, United Technologies has now increased its dividend for the past 25 years, the second longest dividend growth streak on this list. Defensive buys are investments deemed to be lower risk, by virtue of lower correlations to economic cycles. Investors holding shares of United Technologies will own approximately 57% of the combined company while legacy Raytheon shareholders will own approximately 43% of the combined company. We expect that the company will be able to compound earnings-per-share growth by 10% annually through 2024. These are the defense stocks that had the highest total return over the last 12 months. H.B. Expected total annual returns would consist of the following: In total, United Technologies is forecasted to return just 2.7% per year through 2024. We anticipate earnings growth of 5% annually through 2024. The company is expected to payout $8.80 in dividends-per-share this year. Dividend growth investors might be disappointed with Textron, but shares are inexpensive compared to our target valuation. 9.5 billion by U.S. Navy for Columbia-class submarines. 19.6 billion, which was $ 200 million lower expected... Amongst best defensive stocks with dividends customer industries potential for stock price growth 17th, 2019 by Nate Parsh 26 deliveries year. This has helped the company is composed of five business divisions: textron Aviation, Helicopter... Offs in the world low payout ratio of 18.3 Technologies Corporation and will exclude United Technologies’ upcoming spin offs the. 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