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defense communication

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Communication Giant Backed by 9 Years of Dividend Increases Solidifies Position on Best Dividend Stocks List

Aaron Levitt Jan 22, 2020


It’s a good time to be in the defense industry. With rising tensions and natural disasters growing across the globe, firms operating in emergency management, defense and aerospace industries continue to be big winners. This includes our pick in the communications sector. Since adding our pick to the Best Dividend Stocks List, our pick has continued to reward shareholders with strong total returns- including many double-digit dividend increases.

The best part is our pick continues to see plenty of growth on the horizon.

Thanks to a variety of factors, our pick has plenty of potential to see higher revenues, bigger profits and rising shareholder rewards over the next year. First, a record-setting Federal defense budget is boosting the sector’s fortunes with more spending going towards a plethora of different areas, including secure/critical communications needs. That extra $22 billion in spending means plenty of new contracts for defense producers. Secondly, the number of major natural disasters is having local and federal emergency agencies spending big time on new upgraded equipment. With the birth of new 5G networks, this spending has only increased exponentially as many agencies need to upgrade to the faster speeds 5G affords for their critical missions.

But the real reason to be excited about our Best Dividend Stocks List pick is that it’s becoming more and more “tech-like” in its approach. After pivoting towards the cloud, our pick has moved beyond just providing radios and other critical equipment. These days a variety of services and subscriptions dot its product menu. These new services come with higher margins and continued revenues flowing into its coffers.

All in all, the combination of higher spending and the pivot towards enhanced services will continue to benefit our pick for years to come. And it’ll benefit its investors as well.

To summarize, here are five reasons why you should own this stock:

1. Managed to pull in more than $7 billion in revenues in 2018 and last year’s numbers are set to beat that by a wide margin.
2. Big winner in the shift to 5G and upgraded defense budget.
3. Recurring revenues from software and services now make up the bulk of its revenues and they continue to increase.
4. Steadily increased its dividend since its spin-out back in 2011; recently raised its dividend by 12% at the end of 2019.
5. Healthy payout ratio of 30% and yield of 1.48%.

Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.

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