L3Harris Technologies, Inc. LHX recently announced that its board of directors has approved a 3.4% increase in its quarterly dividend rate. The company’s revised quarterly dividend will be $1.20 per share, payable on March 21, 2025, to shareholders of record at the close of the business on March 10, 2025.

The recent increase represents the company’s 24th consecutive annual dividend hike. Following this hike, LHX’s new annualized dividend rate is $4.80 per share, resulting in an annualized dividend yield of 2.33%, based on its share price of $206.11 as of Feb. 28, 2025. The company’s current dividend yield is better than the Zacks S&P 500 composite’s 1.22%.

Can L3Harris Sustain Dividend Hikes?
 

U.S. defense product manufacturers, such as L3Harris, benefit immensely from the country's large defense budget. The U.S. Senate Committee on Appropriations adopted the Fiscal Year 2025 Defense Appropriations Act in August 2024, providing a total of $852.2 billion. This measure, in particular, includes more than $1 billion to meet classified Space Force unmet requirements outlined by the Chief of Space Operations, such as space control, nuclear electric propulsion and commercial sensing. Such funding is expected to benefit L3Harris, which has a significant position in the space business by providing cutting-edge space and intelligence communication technologies.

While the company maintains a strong position in the U.S. defense market, its overseas footprint is also substantial. In the fourth quarter, the company's international revenues accounted for almost 20% of overall revenues. L3Harris continues to see high demand for its defense solutions from the Asia-Pacific, Latin America and South America, as well as the NATO allies of the United States. This is further evidenced by the multi-million-dollar contracts that this defense contractor receives from the global market.

L3Harris was awarded a contract by BAE Systems Maritime Australia in January 2025 to provide the Integrated Platform Management System for the Hunter class frigates of the Royal Australian Navy. As it sees growth potential for its ISR technologies, the company has recently been in talks with nations in the Middle East and Africa. These advancements guarantee consistent future revenues and demonstrate L3Harris' global superiority.

Due to L3Harris’ global presence and contract wins, it continues to generate strong revenues. This provides assurance that the company will be able to sustain shareholder-friendly moves in the future as well.

Another Defense Company’s Recent Dividend Hike
 

Here is a defense company that has been rewarding shareholders with impressive dividend payouts.

On Jan. 27, 2025, Howmet Aerospace Inc. HWM announced that its board of directors approved a 25% hike in its quarterly dividend to 10 cents per share.

Howmet boasts a long-term (three to five years) earnings growth rate of 22.1%. The Zacks Consensus Estimate for HWM’s 2025 sales implies an improvement of 8.5% from the prior-year figure.

LHX Stock Price Movement
 

In the past month, LHX shares have fallen 2.2% compared with the industry’s decline of 0.5%.

Image Source: Zacks Investment Research

LHX’s Zacks Rank & Stocks to Consider
 

L3Harris Technologies currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the same industry include RTX Technologies RTX and Leidos Holdings, Inc. LDOS, each currently carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

RTX Technologies and Leidos have a long-term earnings growth rate of 9.7% and 7.4%, respectively, and a dividend yield of 1.90% and 1.23% each.

The Zacks Consensus Estimate for RTX and LDOS’ 2025 sales indicates year-over-year growth of 4.4% and 2.6%, respectively.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Leidos Holdings, Inc. (LDOS) : Free Stock Analysis Report

L3Harris Technologies Inc (LHX) : Free Stock Analysis Report

Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report

RTX Corporation (RTX) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research