Northrop Grumman (NOC) DIvidends Date & History

Key Takeaways

• Dividend yield: Northrop Grumman offers a forward dividend yield of roughly 1.8%, below the highest-yielding defense peers but consistent with the broader aerospace and defense sector.
• Dividend per share: The company raised its quarterly payout to $2.47 per share, bringing the annualized rate to about $9.88 per share.
• Growth streak: Northrop Grumman has increased its dividend for 22 consecutive years, with five-year annualized dividend growth near 9.7%.
• Sustainability: A payout ratio of roughly 30% of earnings leaves substantial room for continued increases and reinvestment.
• Investor appeal: The stock is better suited to dividend growth investors than to investors seeking maximum current income.

Dividend Overview

Northrop Grumman Corporation (NOC) is a leading global aerospace and defense company. It pays a quarterly dividend, most recently $2.47 per share, which equates to an annualized payout of approximately $9.88 per share and a forward dividend yield near 1.8%. The dividend is paid every three months, following the standard schedule common among large U.S. industrial and defense companies.

Rather than a high-yield income stock, Northrop Grumman is best characterized as a dividend growth stock. Its yield is modest relative to many income-focused equities, but the company pairs that yield with a long history of consistent annual increases and a conservative payout ratio. For investors who prioritize dependable, growing income over maximum current yield, Northrop Grumman's profile fits the dividend growth framework more closely than a pure income strategy.

Dividend History and Growth

Northrop Grumman has paid dividends for decades and has raised its payout every year for 22 consecutive years, a track record that places it among the more consistent dividend growers in the defense industry. In May 2026, the board approved a quarterly dividend of $2.47 per share, an increase of nearly 7% from the prior $2.31 per share, payable on June 17, 2026.

Over the past five years, the dividend has grown at an annualized rate of roughly 9.7%, and over the past ten years the growth rate has been even higher, near 11% annually. This steady progression reflects management's long-standing commitment to returning capital to shareholders while continuing to invest in the company's large and growing order backlog. The consistency of these increases, with no material reductions in recent history, underscores the stability of the dividend program.

Dividend Sustainability and Payout Ratio

Northrop Grumman's dividend appears well supported by its underlying earnings and cash flow. The company's payout ratio stands at roughly 30% of earnings, meaning it distributes less than one-third of its profits as dividends. Free cash flow coverage is also healthy, with cash-based payout ratios generally in the range of roughly 26% to 40%, leaving considerable headroom for reinvestment, share repurchases, and future dividend increases.

The company's financial stability is reinforced by a record order backlog of approximately $104.7 billion, providing multi-year revenue visibility that is characteristic of large defense contractors. Northrop Grumman has reaffirmed 2026 free cash flow guidance in the range of $3.1 billion to $3.5 billion, comfortably exceeding its total annual dividend obligation. Earnings per share (EPS, the company's profit divided by its number of shares) guidance of roughly $28.60 to $29.10 also sits well above the dividend commitment. These factors suggest the dividend is sustainable at current levels and has room to keep growing.

Dividend Compared to Industry Peers

Within the defense sector, Northrop Grumman's dividend profile sits near the middle of its peer group. Lockheed Martin (LMT) offers a higher yield of around 2.4% but carries a meaningfully higher payout ratio near 62% to 65%. General Dynamics (GD) yields roughly 1.7% to 1.9%, broadly in line with Northrop Grumman, with a payout ratio near 37%. RTX (RTX) yields about 1.4% to 1.6%. Boeing (BA), by contrast, currently pays no dividend.

This comparison highlights that Northrop Grumman's yield is average for its industry, but its payout ratio is among the lowest in the group. In other words, investors give up some current income relative to Lockheed Martin but gain a wider margin of safety and arguably more flexibility for future dividend growth.

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Is This Stock Attractive for Dividend Investors?

Northrop Grumman is likely to appeal most to dividend growth investors and long-term, conservative investors who value consistency and reliability over high current income. The company's 22-year streak of annual increases, low payout ratio, and robust order backlog make it a candidate for investors seeking steadily rising income over time. Because the yield is modest at around 1.8%, it is less suitable for income-focused investors who require a high level of current cash flow, such as retirees depending heavily on dividends for living expenses.

Total-return-oriented investors may also find the combination of a growing dividend and share repurchases attractive, though capital appreciation is not guaranteed. As with any equity, the stock's suitability depends on an investor's individual goals, time horizon, and risk tolerance. The dividend's sustainability appears strong, but investors should weigh the modest yield against their specific income needs before considering the stock.

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