General Dynamics (GD) has consistently looked to enhance its shareholders’ wealth over the years. On March 6, the aerospace and defense contractor raised its quarterly dividend by 9.7%. The latest hike is the 22nd consecutive annual dividend increase that has been approved by General Dynamics’ board of directors.
General Dynamics’ quarterly dividend rate has now increased to $1.02 per share from $0.93. The company will pay the new dividend on May 10, 2019, to its shareholders of record as of April 12, 2019.
In the past eight years, the company’s annualized dividend rate has soared ~121%. Last year, it returned $1.1 billion in the form of dividend payouts, which is significantly higher than the $673 million it paid in 2010.
Dividend yield and payout ratio
General Dynamics stock has an impressive dividend yield and dividend payout ratio. With a yield of 2.2%, the company has the second-highest dividend yield among its peers (XLI) after Lockheed Martin’s (LMT) 2.9%.
Other aerospace and defense stocks including Boeing (BA) and Northrop Grumman (NOC) have a lower dividend yield of 2% and 1.7%, respectively. General Dynamics’ dividend payout ratio is 32.6%, while competitors Lockheed Martin, Boeing, and Northrop Grumman’s dividend payout ratios are 46.6%, 37.9%, and 26%, respectively.
General Dynamics has also been enhancing shareholders’ wealth through aggressive share buybacks. Since 2010, the company has repurchased ~$16 billion worth of its common stock. Last year, General Dynamics repurchased $1.8 billion worth of its common stock.
In December, the company’s board of directors authorized an additional 10 million share repurchase program, which at the stock’s current market price of $166.34, translates to $1.7 billion worth of its common stock.