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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.