Yahoo Finance Defense Stock Roundup: RTN, LMT, NOC Win Deals, BA Hikes Dividend
Over the trailing five trading sessions, the Aerospace-Defense industry witnessed a generous flow of funds from the Pentagon. Consequently, major indices in this space ended in the green. Evidently, the S&P 500 Aerospace & Defense (Industry) index moved up 2.3% over the said time frame, while the Dow Jones U.S. Aerospace & Defense index saw an uptick of 2.4%.
Among last week’s highlights, defense majors Raytheon Company RTN, Lockheed Martin Corp. LMT, Northrop Grumman Corp. NOC and General Dynamics Corp. GD secured a number of orders from the Department of Defense’s daily funding session. Meanwhile The Boeing Company BA awarded shareholders with a dividend hike.
Recap of Last Week’s Key Stories
1. Raytheon’s business unit, Missile Systems, secured a modification contract worth $302.4 million under the Foreign Military Sales (FMS) program. Work related to this deal is scheduled to be over by June 2022. Majority of the work will be executed in Tucson, AZ; Glascoed, Wales, U.K. and Dallas, TX. FMS funds will be utilized to partly fund the order.
The contract was awarded by the Naval Air Systems Command, Patuxent River, MD. Per the terms of the agreement, Raytheon will procure 618 Joint Standoff Weapon (JSOW) air-to-ground missiles (AGM-154 Block III C), containers, component parts/support equipment (spares) and engineering technical assistance. These weapons and associated support will be provided to the government of Saudi Arabia.
Notably, the JSOW AGM-154 is a family of low-cost, air-to-ground glide missiles manufactured by Raytheon (read more: Raytheon Arm Wins $302M Deal to Boost Saudi Arabia's Defense).
2. Lockheed Martin’s Missiles and Fire Control business segment won a contract worth $961.2 million for sustainment, modernization and development. The contract was awarded by the Air Force Life Cycle Management Center, Robins Air Force Base, GA.
Work related to this deal will be carried out in Orlando, FL; Ocala, FL and Warner Robins, GA. It is scheduled to be complete by Dec 17, 2022.
Another business segment of the company, Rotary and Missions Systems clinched a FMS contract worth $136 million, for manufacturing DDG AEGIS weapon system J7 baseline. Work related to this deal is scheduled to be over by December 2018.
The contract was awarded by the Naval Sea Systems Command, Washington, D.C. Majority of the work will be carried out in Moorestown, NJ (read more: Lockheed Wins $136M Deal to Aid Japan's Aegis System).
3. General Dynamics’ Mission Systems business won a contract worth $198 million for the procurement, manufacturing, testing and delivery of the AN/USC-61(C) Digital Modular Radio (DMR) systems. The defense major will also supply high frequency distribution amplifier group components, spare parts and engineering services to support field and maintenance work.
The contract was awarded by the Space and Naval Warfare Systems Command, San Diego, CA. Work related to this deal will be executed in Scottsdale, AZ, and is scheduled to be over by Dec 2022.
Notably, the cumulative value of the contract may go up to $209 million, if the options included in the contract are exercised (read more: General Dynamics Wins $198M Deal to Manufacture DMR Systems).
4. Northrop Grumman’s business unit, Northrop Grumman Systems Corp., secured a contract worth $444.6 million to support the AAQ-24 large aircraft infrared counter-measure (LAIRCM) direct sales public private partnership for repair of 34 national stock numbers. Work related to this deal is scheduled to be over by Dec 14, 2022 and will be executed in Warner Robins, GA.
The contract was awarded by the Air Force Sustainment Center, Robins Air Force Base, GA. FMS funds will be used to partly finance the task.
Notably, the primary purpose of Northrop Grumman’s LAIRCM program is to protect large aircraft from man-portable missiles (read more: Northrop Grumman Wins $445M Air Force Deal to Support LAIRCM ).
5. Boeing recently boosted its quarterly dividend by 20.4%. Boeing will now pay a quarterly dividend of $1.71 per share, up from $1.42 paid earlier, bringing the annualized dividend to $6.84. The company will pay the revised dividend on Mar 2, 2018 to stockholders on record as of Feb 9.
The company has alongside authorized a new stock-repurchase plan of $18 billion. Boeing’s management is yet to decide on the timing and volume of repurchases.
Under the new share-repurchase authorization, buybacks will take place over the next 24-30 months (read more: Boeing Announces 20% Dividend Hike: Time to Buy the Stock?).
Performance
Over the last five trading sessions, most of the defense biggies put up a strong show, except L3 Technologies Corp. LLL. Textron Inc. TXT gained the most in the last five days, with its share price rising 3.1%.
Over the last six months, the entire industry has put up a stellar performance, except General Dynamics. This time, Boeing gained the most, with its shares gaining 48.8%, followed by Rockwell Collins.
The following table shows the price movement of the major defense players over the past five trading days and during the last six months.
Company | Last Week | Last 6 Months |
LMT | 2.17% | 14.33% |
BA | 2.12% | 48.75% |
GD | 1.16% | -2.97% |
RTN | 0.99% | 16.10% |
NOC | 0.36% | 19.26% |
COL | 0.20% | 26.57% |
TXT | 3.08% | 18.44% |
LLL | -0.08% | 16.32% |
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