Yahoo Finance RTX Corp's Dividend Analysis
Exploring the Sustainability and Growth of RTX Corp's Dividends
RTX Corp (NYSE:RTX) recently announced a dividend of $0.63 per share, payable on 2024-06-13, with the ex-dividend date set for 2024-05-16. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into RTX Corp's dividend performance and assess its sustainability.
What Does RTX Corp Do?
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RTX is a diversified aerospace and defense industrial company formed from the merger of United Technologies and Raytheon, with roughly equal exposure as a supplier to commercial aerospace manufacturers and to the defense market. The company operates in three segments: Collins Aerospace, a diversified aerospace supplier; Pratt & Whitney, an aircraft engine manufacturer; and Raytheon, a defense prime contractor providing a mix of missiles, missile defense systems, sensors, hardware, and communications technology to the military.
A Glimpse at RTX Corp's Dividend History
RTX Corp has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down RTX Corp's Dividend Yield and Growth
As of today, RTX Corp currently has a 12-month trailing dividend yield of 2.22% and a 12-month forward dividend yield of 2.37%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, RTX Corp's annual dividend growth rate was 2.40%. Extended to a five-year horizon, this rate decreased to -5.60% per year. And over the past decade, RTX Corp's annual dividends per share growth rate stands at -1.00%.
Based on RTX Corp's dividend yield and five-year growth rate, the 5-year yield on cost of RTX Corp stock as of today is approximately 1.66%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, RTX Corp's dividend payout ratio is 0.74, which may suggest that the company's dividend may not be sustainable.
RTX Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks RTX Corp's profitability 7 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. RTX Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and RTX Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. RTX Corp's revenue has increased by approximately 4.80% per year on average, a rate that underperforms approximately 58.72% of global competitors.
As RTX Corp navigates through its dividend payments, growth rates, and sustainability metrics, investors should consider these factors in their investment decisions. Is RTX Corp's dividend policy aligned with your long-term investment strategy? GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
