Northrop Grumman (NOC) DIvidends Date & History

Key Takeaways

• Northrop Grumman offers a current dividend yield of 1.39% with quarterly payments of $2.31 per share.
• The company has raised its dividend for 22 consecutive years, with a recent 12% increase in 2025.
• Payout ratio stands at 31.72% based on trailing earnings, indicating strong sustainability.
• Free cash flow of $2.9 billion (trailing twelve months) provides ample coverage for dividends.
• 2026 guidance projects free cash flow of $3.1–$3.5 billion, supporting ongoing payouts.
• Last ex-dividend date was February 23, 2026, with payment on March 11, 2026.

Dividend Overview

Northrop Grumman Corporation (NOC), a leading aerospace and defense contractor, maintains a quarterly dividend policy with a current payout of $2.31 per share, equating to an annual dividend of $9.24. This delivers a yield of 1.39% based on recent stock prices. The most recent ex-dividend date was February 23, 2026, with payment following on March 11, 2026. NOC is classified as a dividend growth stock, having consistently increased payouts over two decades without interruption since 2004. While the yield is modest compared to high-yield sectors, the combination of reliable payments and above-average growth—averaging 9.66% annually over the past five years—appeals to investors prioritizing income stability and appreciation in the defense industry.

Dividend History and Growth

Northrop Grumman has a robust dividend history, paying quarterly dividends since well before its 22-year streak of annual increases began in 2004. The quarterly dividend rose from $2.06 in 2024 to $2.31 in 2025, marking a 12% hike—the latest in a series of double-digit raises. Earlier increases include 10% in 2024 from $1.87 and steady growth tracing back to $0.18 per quarter in the early 2000s. Annual dividends have compounded from $0.73 in 2003 to $9.24 today, reflecting a long-term strategy of returning capital to shareholders amid strong defense sector demand. A rare cut occurred in 1992, but payments have been consistent and growing since.

Dividend Sustainability and Payout Ratio

NOC's dividend appears highly sustainable, with a trailing twelve-month payout ratio of 31.72% against earnings per share (EPS) of $29.10. This leaves significant room for reinvestment and future raises. Free cash flow (FCF) totaled $2.9 billion over the trailing twelve months, easily covering the annual dividend obligation, while 2026 guidance anticipates $3.1–$3.5 billion in FCF. Debt-to-equity ratio of 107.26% is elevated but typical for capital-intensive defense firms, balanced by predictable government contracts and operating cash flows. Earnings and FCF coverage exceed 3x the dividend, underscoring financial stability.

Dividend Compared to Industry Peers

In the aerospace and defense sector, Northrop Grumman's 1.39% yield trails peers like General Dynamics (GD) at 1.81% and Lockheed Martin (LMT), which offers around 2.7%. RTX (RTX) yields approximately 2.3%. NOC's lower yield reflects its focus on growth and share repurchases alongside dividends, but its payout ratio of 31.7% is competitive, and the 22-year increase streak outpaces some rivals. This positions NOC as average-to-modest in yield but superior in growth consistency within a sector averaging 1.5–2.5% yields.

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Is This Stock Attractive for Dividend Investors?

Northrop Grumman suits dividend growth investors seeking reliable increases in a defensive sector buoyed by geopolitical tensions and steady U.S. defense budgets. Its 22-year streak and low 31.7% payout ratio appeal to those prioritizing compounding income over immediate high yields. Conservative long-term investors may value the stability of government-backed revenues, strong FCF coverage, and total shareholder returns enhanced by buybacks. However, the modest 1.39% yield may deter pure income seekers favoring higher-yielding utilities or REITs. Total return potential from capital appreciation in aerospace programs like the B-21 Raider adds appeal for balanced portfolios, though cyclical defense spending risks warrant diversification. Overall, NOC fits growth-oriented dividend strategies amid sector tailwinds.

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