Northrop Grumman Rewards Shareholders With 12% Dividend Hike

Core Viewpoint - Northrop Grumman Corp. has approved a 12.1% increase in its quarterly dividend, marking its 22nd consecutive annual dividend hike, reflecting the company's strong cash flow generation capabilities and commitment to returning value to shareholders [1][2]. Dividend Increase - The new quarterly dividend is set at $2.31 per share, leading to an annual dividend of $9.24 per share, which corresponds to an annual dividend yield of 1.94% based on a share price of $476.60 as of May 20 [1][2]. - This yield surpasses the Zacks S&P 500 composite's yield of 1.24%, indicating Northrop Grumman's robust financial health and ability to reward shareholders [2]. Cash Flow Generation - Northrop Grumman reported a cash flow from operating activities of $481 million in the first quarter of 2025, which supports the recent dividend increase [3]. - The company also engaged in share repurchases worth $480 million during the same period, showcasing its commitment to shareholder-friendly actions [4]. Future Outlook - The company is expected to continue its trend of stable dividend hikes, supported by a strong order backlog of $92.80 billion as of the end of the first quarter of 2025, which enhances future revenue and cash flow prospects [5]. - Northrop Grumman anticipates sales between $42.00 billion and $42.50 billion for 2025, reflecting a 3.6% increase from the previous year, which should facilitate further dividend increases [6]. Peer Comparison - Other defense companies, such as General Dynamics and Howmet Aerospace, have also announced dividend hikes, indicating a broader trend of rewarding shareholders within the industry [7][8][9].