Dividend Power Stock of the Week - 04/29/23
L3Harris Technologies
L3Harris Technologies (LHX) is a dividend stock I own. It is also one of my favorite aerospace and defense contractors. The company is the market leader in tactical communications. Moreover, L3Harris has a significant presence in other markets, effectively making it the communications prime contractor.
The company was formed in 2019 from the merger of L3 and Harris Corporation L3Harris now has three business segments: Integrated Mission Systems (~42% of revenue), Communication Systems (~23% of revenue), and Space and Airborne Systems (~35% of revenue).
Total revenue was $17,062 million in 2022 and $17,430 million in the past twelve months.
Despite the recent upward trend in the broader market, L3Harris has not participated. According to Stock Rover*, the stock price is down (-5.8%) year-to-date and (-17.4%) in the trailing year after adjusting for dividends return. For perspective, the S&P 500 Index is now up +1.4% in the past twelve months.
L3Harris has a yield (FWD) of 2.34%, not a high value, but above the S&P 500 Index's dividend yield. Additionally, the yield is the highest since the merger and above the 5-year average. L3Harris gained Harris's dividend history. As a result, the streak is 22 years, making the stock a Dividend Contender. The company has increased the dividend at an approximately 15% rate in the last five years. The dividend safety is excellent, with a modest payout ratio of about 34% and a 'B+ dividend quality score.
Source: Portfolio Insight*
Lowe's is undervalued based on its regular earnings multiple. The stock trades at a price-to-earnings (P/E) ratio of ~15.9X. This is below the 5-year range. Consequently, investors seeking an acceptable yield with excellent dividend growth to generate passive income should look at this stock.
Source: Portfolio Insight*
Disclosure: Long LHX
Disclaimer: The author is not a licensed or registered investment adviser or broker/dealer. He is not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.