LMT Dividend Calculator

About LMT

Lockheed Martin Corporation — ticker LMT — is the largest US defense contractor by revenue and one of the largest defense primes in the world. The company is organized into four operating segments: Aeronautics (F-35 Joint Strike Fighter, F-16, C-130, classified aircraft work); Missiles and Fire Control (PAC-3 Patriot missile interceptor, THAAD ballistic missile defense, HIMARS and GMLRS rocket artillery); Rotary and Mission Systems (Sikorsky helicopters — Black Hawk, CH-53K, presidential Marine One — and the Aegis Combat System used on US Navy guided-missile cruisers and destroyers); and Space (national security satellites, ballistic missile defense interceptors, and the Orion crewed spacecraft program for NASA). Aeronautics is the single largest segment by revenue, and within it the F-35 program is the dominant line item — typically running around a quarter of total company revenue when production, sustainment, and follow-on contracts are aggregated.

The customer concentration is structural and is the central feature of the investment profile. Roughly 70%+ of revenue flows from the US Department of Defense and other US government agencies (NASA, the intelligence community, the Department of Energy nuclear weapons program). Foreign Military Sales — direct sales to allied governments under US State Department approval — typically accounts for the next 20-25%, with the largest individual FMS customers concentrated in NATO Europe, Israel, Japan, South Korea, Australia, and the Gulf states. The residual is commercial and other. This customer mix means LMT's revenue is structurally tied to US national-security budget priorities and to the FMS pipeline that flows alongside US foreign-policy alignment. A single dominant customer — the Pentagon — is the central concentration risk and the central source of stability simultaneously.

The dividend track record is the second structural feature. LMT has raised the per-share dividend every year for more than twenty-two consecutive years as of 2026, on track to clear the 25-year Dividend Aristocrats threshold within the next several years. The streak survived the post-Cold War procurement drawdown of the 1990s, the post-9/11 buildup, the 2009 financial crisis, the 2011-2013 sequestration episode that imposed mandatory across-the-board defense budget cuts, the COVID-era industrial-base disruption, and recent supply-chain stress affecting microelectronics and propellants. Investment-grade credit ratings have been maintained throughout. The fixed-price contract backlog typically provides three or more years of forward revenue visibility on a book basis, which is unusual in equity-market terms — most industrial companies have far shorter forward order books. That backlog is a structural argument for treating LMT as a quasi-utility on the revenue side, even though political and program-execution risks are real.

Political-cycle resilience is the underappreciated piece of the case. Defense budgets in nominal-dollar terms have grown in nearly every fiscal year since the late 1990s, across both Republican and Democratic administrations, and have grown in real terms across most of that period as well. The political consensus on maintaining US military capability vis-à-vis great-power competitors is bipartisan, and the specific programs LMT executes — strategic deterrence, missile defense, allied-power air superiority — sit at the center of that consensus rather than at the contested edges. Individual program funding is debated each year; the aggregate budget envelope tends to grow regardless. Expense ratio is not applicable to individual stocks — the figure in the calculator above is zero, since there is no fund wrapper between you and the underlying shares.

How LMT pays dividends

LMT pays cash dividends quarterly, on an approximately March-June-September-December cadence. The board declares the per-share amount roughly four to six weeks before each pay date; the ex-dividend date typically falls in the first week of the second month of the quarter, and the pay date follows about three weeks after the ex-date. Holders of record at the close on the day before the ex-date receive the distribution; the share price drops on the open of the ex-date by approximately the per-share amount.

The once-per-year hike pattern is the operationally distinctive feature. LMT announces the new dividend rate in October each year — typically alongside the third-quarter earnings release — and the new rate takes effect on the December payment, the first quarterly distribution after the October announcement. This means the calendar year of a hike is split: the March, June, and September payments use the prior year's rate, and only the December payment reflects the new rate. The year-over-year dividend growth rate the calculator uses smooths this into an annualized figure. The historical pattern of the per-share hike has run in the mid-to-high single digits — roughly 5-9% on a five-year trailing basis depending on the window measured, slower than the post-2014 catch-up rates large banks have produced and slower than the ~10% Microsoft growth cadence, but faster than long-run inflation by a comfortable margin.

The payout ratio typically runs in the 40-50% of earnings range, leaving meaningful room for the parallel buyback program. This is the dual-channel capital-return policy familiar from any mature large-cap dividend grower: the dividend channel is the structural commitment that grows every year, the buyback channel is the flex variable that absorbs additional cash flow. LMT's buyback program has typically reduced the share count at a 3-5% annual pace, which is operationally significant for dividend math. Per-share dividend growth depends on two inputs — the growth in the total dollar dividend outlay, and the reduction in shares outstanding that the same outlay is distributed over. A 5% hike in the total outlay combined with a 3% reduction in share count produces something close to an 8% per-share dividend hike. This amplifier is why headline per-share dividend growth at LMT has historically been higher than the underlying growth in the company's total dividend spending — the buyback program does meaningful work on the per-share line that investors see.

DRIP through Schwab, Fidelity, Vanguard, IBKR, or Robinhood works the same way it does for any quarterly US dividend stock — the cash distribution buys additional shares at the prevailing price on or near the pay date, with fractional-share reinvestment supported. LMT dividends are qualified for the long-term capital-gains rate in taxable accounts assuming the standard sixty-day holding-period rule is met. There is no managed-distribution policy, no return of capital, and no options overlay; the dividend is funded out of net income.

Who LMT suits

LMT suits the income investor who reads defense spending as structurally elevated for the foreseeable future and who wants direct exposure to that thesis inside a dividend-focused portfolio. The macro setup is the case: the Russia-Ukraine war remains ongoing and has driven a generational rearmament cycle across NATO Europe with multi-year procurement commitments for air defense, fighters, and munitions; China-Taiwan tension continues to anchor the Indo-Pacific deterrence posture and the corresponding US Navy and Air Force modernization plans; Middle East instability continues to drive Gulf-state and Israeli FMS demand; and the US itself is rebuilding munitions production capacity that was allowed to atrophy after the post-Cold War drawdown. None of these conditions are likely to resolve over a five-year window, and several look likely to persist over a decade-plus window. LMT is the most direct large-cap equity expression of that thesis available in the dividend-growth universe.

The structural caveats are real and worth naming. The single-contractor, single-dominant-customer concentration is the central one — LMT's revenue is structurally tied to US defense budget priorities, and a meaningful procurement shift away from a flagship program (most relevantly the F-35) would compress earnings in a way that more diversified industrials would not face. Program execution risk on the cost-plus and fixed-price contract mix is the second — fixed-price contract overruns hit the company's margins directly, as the recent classified aircraft programs at the company have demonstrated. The political-cycle resilience argument holds in aggregate but does not insulate any individual program from cancellation or restructuring.

The moral consideration deserves explicit acknowledgment. A meaningful share of income-focused investors screen defense contractors out of their portfolios on ethical or ESG grounds, and the case for that exclusion is one a defense-contractor page should flag honestly. LMT's products are used in active conflict zones; investors uncomfortable holding equity exposure to those use cases have legitimate reasons for the screen. For readers who want the structural dividend-growth profile of a mature industrial Aristocrat without defense exposure, the cleaner alternatives are Illinois Tool Works (ITW), Emerson Electric (EMR), and Caterpillar (CAT) — comparable streak length and dividend cadence with no Pentagon revenue concentration.

Within the defense peer set the comparison points are RTX (formerly Raytheon Technologies, the 2020 merger of Raytheon Company with United Technologies' aerospace business — broader diversification than LMT because it spans defense plus commercial aerospace via Pratt & Whitney engines and Collins Aerospace avionics), Northrop Grumman (NOC, heavier exposure to the B-21 Raider stealth bomber program — execution risk on B-21 is the central NOC-specific variable), General Dynamics (GD, smaller than LMT, diversified beyond defense into IT services via GDIT and into business jets via Gulfstream), and Boeing (BA, where the defense story sits inside a much larger commercial-aerospace business that has been the source of multi-year operational difficulty — not a clean dividend-growth peer). Most defense-focused dividend portfolios hold more than one of LMT, RTX, NOC, and GD rather than concentrating in a single name, since program-specific risk is real. As with any single-stock position, this content is educational only; it is not a recommendation to buy, sell, or hold LMT.