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Raytheon Raises Dividend by 7% After Mixed Q1 Earnings

Raytheon Technologies Corp. (RTX) is a global premier systems provider of high-tech products and services to the aerospace and defense industries.

The company generated 76.5% of its revenue from products and 23.5% of its revenue from services during the first quarter of 2021. In terms of customer concentration, the company’s revenue is derived from the U.S. government (50.8%), commercial sources (33%), foreign military sales through the U.S. government (8.5%), and foreign government sales (7.7%).

Mixed Q1 Results, Positive Guidance

Raytheon reported first-quarter revenue that rose by 34.2% to $15.25 billion, missing consensus estimates by $80 million, and non-GAAP earnings of 90 cents per share, beating consensus estimates by seven cents. With a strong defense backlog and a recovery in commercial air travel, the company raised the lower end of its 2021 outlook.

Analysts have been relatively bullish on the stock despite headwinds in commercial travel and a global chip shortage. In May, Redburn analyst Jeremy Bragg initiated coverage with a buy rating, citing large, market-leading, high-quality companies that are well placed to outgrow their respective markets, including Pratt & Whitney, Collins Aerospace and Raytheon Defense.

The company raised its quarterly dividend by 7.4% to $0.51 per share, which represents a 2.43% forward yield. The dividend is payable on June 17, 2021, to shareholders on record as of May 21, 2021.

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