Leidos Raises Quarterly Dividend 4.7% to $0.45

Leidos Holdings raised its quarterly dividend to $0.45 from $0.43, an increase of 4.7%. The next ex-dividend date is December 15, 2026, and payment is scheduled for December 31, 2026.

Why the dividend changed

Leidos gave no specific operating rationale for the increase. Its declaration said only that the board approved the higher payment, so the decision is best read against the company’s recent cash generation and capital-allocation record rather than as a response to a stated one-time event. The declaration identifies no stock split, merger, spin-off or special dividend behind the change.

Second-quarter results supplied the clearest financial context. Leidos reported $793 million of operating cash flow and $761 million of non-GAAP free cash flow for the quarter, while raising its fiscal 2026 operating-cash-flow outlook to approximately $1.85 billion. Revenue was $4.6 billion, up 7% from a year earlier. Chief Executive Tom Bell said the company was seeing growth across Defense Tech, Energy Infrastructure and Cyber and had better visibility into Managed Healthcare. Leidos’s second-quarter release tied the guidance increase to revenue, earnings and cash performance.

The company was also balancing shareholder returns with debt reduction and acquisitions. Its earnings presentation said strong cash flow enabled early repayment of the remaining $300 million of commercial paper used for the Entrust acquisition and showed $127 million returned to shareholders in the quarter. The same presentation described the balance sheet as capable of funding growth investment, strategy-aligned acquisitions and repurchases. That context supports the higher regular payment, although management did not explicitly make that causal link.

Dividend track record

The increase extends Leidos’s dividend-growth streak to 7 consecutive years. The latest four payments before the increase were $0.43, with ex-dividend dates of December 15, 2025, March 16, 2026, June 15, 2026, and September 15, 2026. The four payments immediately before those were $0.40. The pattern shows step-ups that are held for several quarters rather than frequent changes within a year.

Full-year totals also show gradual acceleration. The annual payout rose from $1.36 in 2020 to $1.40 in 2021 and $1.44 in 2022. It then reached $1.46 in 2023, $1.54 in 2024 and $1.63 in 2025. Annual growth was 1.4% in 2023, then strengthened to 5.5% in 2024 and 5.8% in 2025. The 5-year record is 3.3% annual growth.

Is the dividend covered?

The dividend uses 16% of earnings. That leaves most reported profit outside the regular distribution and indicates substantial earnings coverage.

SmarterDividends rates the dividend A, with a safety score of 89. The grade corresponds to very safe (score 80-100). In plain terms, the low earnings payout and multiyear record of increases provide a sizable buffer, although the score does not guarantee that the board will maintain future payments.

Yield and valuation

At a share price of $142.98, the forward yield is 1.20%, below the Technology sector median of 1.40%. The stock’s 25.2% loss over the past year has not lifted the yield above the sector benchmark. For income, 100 shares produce $172.00 a year based on the annual dividend per share of $1.72.

SmarterDividends estimates fair value at $104.93 and classifies the shares as overvalued, corresponding to 27% downside to fair value. The yield discount and valuation verdict describe different dimensions: the first compares income with the sector, while the second compares the share price with a fundamental estimate.

What to watch

The first checkpoint is Leidos’s third-quarter report. The company scheduled results for November 3, 2026, covering the period ended October 2, 2026. Investors can compare those figures with the raised fiscal 2026 cash-flow guidance and review any updated language on capital deployment. The earnings notice says the release will be issued before the conference call.

The next income dates are December 15, 2026, for ex-dividend trading and December 31, 2026, for payment. Operationally, Leidos has also completed a transaction combining its Security Enterprise Solutions business with Analogic in a new joint venture while retaining a significant minority stake. Management said the deal sharpens its focus on the growth engines in the NorthStar 2030 strategy. The joint-venture announcement makes execution of that portfolio change another item to follow alongside cash generation and dividend coverage.