Lockheed Martin Raises Quarterly Dividend 4.4% to $3.60

Lockheed Martin raised its quarterly dividend 4.4% to $3.60 per share, from $3.45. The shares trade ex-dividend on December 1, 2026, and the payment is due December 31, 2026, according to the company’s declaration.

Why the dividend changed

Lockheed Martin linked the increase to investment in programs expanding its backlog and what it called disciplined and dynamic capital allocation. The board authorized the payment on October 9, 2026, continuing an annual increase that management says now extends for 24 consecutive years.

The operating backdrop supports that explanation. Third-quarter sales increased 11% from a year earlier to $20.7 billion, while net earnings increased 14% to $1.8 billion. All four business segments produced sales growth, led by higher F-35 activity and production ramps in air defense and missile programs. Backlog reached a record $292.0 billion, including a large multiyear award for PAC-3 missile interceptors, the company said in its third-quarter results.

Cash generation remained substantial even as quarterly cash flow eased from the prior year. Lockheed Martin reported $3.4 billion of cash from operations and $3.0 billion of free cash flow for the quarter. Management raised its full-year free-cash-flow outlook to about $7.8 billion to $8.0 billion and also increased its sales and earnings guidance. Chief Executive Jim Taiclet cited that financial momentum and the record backlog as the basis for the dividend increase.

The balance-sheet context is also relevant. Lockheed Martin ended the quarter with $5.96 billion of cash and cash equivalents, while its filing identified continued contract and funding negotiations for later F-35 production lots as a potential future pressure on operations and cash flow. Those negotiations do not explain the increase, but they remain an important constraint on capital allocation. The company’s quarterly filing confirms that the higher dividend was authorized after the quarter ended.

Dividend track record

The increase continues a steady pattern of annual adjustments rather than irregular or special distributions. The quarterly payment was $3.30 for the ex-dividend dates from December 2, 2024, through September 2, 2025, then rose to $3.45 for the next four payments. The new $3.60 rate begins with the December 1, 2026, ex-dividend date.

Full-year payments increased from $9.80 per share in 2020 to $10.60 in 2021, $11.40 in 2022, $12.15 in 2023, $12.75 in 2024 and $13.35 in 2025. The annual increases moderated from 8.2% in 2021 to 4.7% in 2025, while dividend growth over the past five years averaged 6.6% annually. The company’s dividend history shows regular quarterly payments through the latest completed distribution.

Lockheed Martin says this is its 24th consecutive annual increase. The last annual cut was in 2000, placing the current streak within a longer history that has included a reduction but no recent interruption.

Is the dividend covered?

The dividend consumes 49% of earnings. That leaves earnings coverage for the distribution while retaining part of profit for production capacity, research, debt service and other corporate needs.

SmarterDividends rates the dividend A, with a safety score of 89. That grade means the payout is considered very safe within the service’s 80-100 scoring band. The assessment reflects a moderate earnings payout ratio and an established record of annual increases, although no dividend is guaranteed.

Yield and valuation

At a share price of $635.20, Lockheed Martin’s $14.40 annual dividend provides a 2.27% forward yield. That exceeds the Industrials sector median forward yield of 1.63%, giving the shares a higher current income rate than the sector benchmark.

SmarterDividends estimates fair value at $525.21 and assigns a fair valuation verdict, with 13% downside recorded relative to that estimate. The shares have produced a 32.0% gain over the past year, which helps explain why the yield remains below the level that would result from a lower share price despite the dividend increase.

What to watch

The immediate date is December 1, 2026, when the shares trade ex-dividend. Investors recorded as eligible for that distribution are scheduled to receive $3.60 per share on December 31, 2026. At the new annual rate, 100 shares produce $1,440.00 of annual dividend income.

Operating cash flow and the raised full-year guidance will be central when Lockheed Martin next reports results. The company’s progress finalizing contracts and funding for F-35 production lots 20 and later also warrants attention because management has warned that insufficient authorization and funding could affect future results and cash flow. Backlog conversion, missile-production ramps and capital requirements will show how much financial capacity remains after funding the higher quarterly payment.