Northrop Grumman Rewards Shareholders With 12% Dividend Hike

Northrop Grumman Corp. NOC recently announced that its board of directors has approved a 12.1% hike in its quarterly dividend to $2.31 per share, marking its 22nd consecutive annual dividend hike. The revised quarterly dividend is payable on June 18, 2025, to shareholders of record at the close of business on June 2.Following the recent hike, Northrop Grumman will now pay annual dividend of 9.24 per share. This represents an annual dividend yield of 1.94% based on its share price worth $476.60 as of May 20.NOC’s annualized dividend yield is higher than the Zacks S&P 500 composite’s yield of 1.24%. This signifies Northrop Grumman’s strength in the business to generate enough cash flow to reward shareholders with improved dividend payouts.Can Northrop Grumman Sustain Dividend Hikes?A solid cash distribution strategy is generally buoyed by the steady performance of a company in generating meaningful cash flows from its operations. To this end, it is imperative to mention that Northrop Grumman generated a solid cash flow from operating activities worth $481 million during the first quarter of 2025, which, in turn, must have enabled it to sanction the latest dividend hike.A stable cash flow from operations also allows a company to undertake other shareholder-friendly actions like share repurchases. Notably, in the first quarter, NOC repurchased shares worth $480 million.Looking ahead, we may expect this defense prime to continue rewarding its shareholders with stable dividend hike movements, backed by its business strength. For a defense contractor like NOC, business strength lies in the orders that it receives, which convert into a robust backlog and thereby bolster the company’s future revenue and cash flow generation prospects. Notably, NOC exited first-quarter 2025 with a record backlog of $92.80 billion.Northrop Grumman expects to generate sales in the range of $42.00-$42.50 billion for 2025, suggesting an increase of 3.6% from the prior-year reported figure. This upside in sales and consequent expected cash flow generation should allow the company to fund notable dividend hikes in the days ahead.Peer MovesHere are some other defense companies that have also awarded their shareholders with impressive dividend hikes.General Dynamics GD: In March 2025, the company announced that its board of directors had approved a 5.6% increase in the quarterly dividend rate. Its revised quarterly dividend will be $1.50 per share.GD boasts a long-term (three to five years) earnings growth rate of 10%. The Zacks Consensus Estimate for GD’s 2025 sales is pinned at $50.47 billion, indicating year-over-year growth of 5.8%.Howmet Aerospace HWM: In January 2025, the company’s management approved a dividend hike to 10 cents per share. This indicates a 25% hike from the previous quarter’s dividend of eight cents.HWM boasts a long-term earnings growth rate of 19%. The Zacks Consensus Estimate for HWM’s 2025 sales is pinned at $8.06 billion, indicating year-over-year growth of 8.5%.L3Harris Technologies LHX: In February 2025, the company announced that its board of directors had approved a 3.4% increase in the quarterly dividend rate. Its revised quarterly dividend is now $1.20 per share.LHX has a long-term earnings growth rate of 12%. The Zacks Consensus Estimate for LHX’s 2025 sales is pinned at $21.53 billion, indicating year-over-year growth of 1%.NOC’s Price PerformanceIn the past three months, shares of Northrop Grumman have risen 5.9% compared with its industry‘s growth of 13.1%.Image Source: Zacks Investment ResearchNOC’s Zacks RankNorthrop Grumman currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>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 Northrop Grumman Corporation (NOC): Free Stock Analysis Report General Dynamics Corporation (GD): Free Stock Analysis Report L3Harris Technologies Inc (LHX): Free Stock Analysis Report Howmet Aerospace Inc. (HWM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks