RTN is a Dividend Contender with a 12-year streak of dividend increases. The company pays quarterly dividends of 73.25¢ per share in the months of February, May, August and November. At the current share price of $126, the stock yields 2.32%.
I'm busy consolidating several portfolios containing my dividend paying stocks. The process is almost complete with only a couple of positions still to be transferred. Today's transfer is a new position for DivGro, so I now own 62 different stocks and funds.
Since completing the consolidation of my Scottrade and traditional IRA portfolio's, Ive been transferring stocks from my Roth IRA. Here's a summary of Roth IRA stocks transferred so far:
The 2 buys I'm transferring today are connected with red dashed lines. Average cost basis is $107.43, while yield on cost (YoC) averages to 2.31%.
|2014-01-03||Bought: 11 shares of RTN at $89.35 per share:||$||982.88|
|2014-05-01||Dividend on 11 shares at 60.5¢ per share:||$||6.66|
|2014-08-07||Dividend on 11 shares at 60.5¢ per share:||$||6.66|
|2014-10-30||Dividend on 11 shares at 60.5¢ per share:||$||6.66|
|2015-02-05||Dividend on 11 shares at 60.5¢ per share:||$||6.66|
|2015-04-30||Dividend on 11 shares at 67.0¢ per share:||$||7.37|
|2015-08-06||Dividend on 11 shares at 67.0¢ per share:||$||7.37|
|2015-11-12||Dividend on 11 shares at 67.0¢ per share:||$||7.37|
|2016-02-04||Dividend on 11 shares at 67.0¢ per share:||$||7.37|
|2016-02-19||Bought: 13 shares of RTN at $122.73 per share:||$||1,595.49|
|Total Capital Invested||$||2,578.37|
|Total Dividends Received:||$||56.10|
With this transfer, DivGro's projected annual dividend income (PADI) increases by $70.32 and I'm adding $56.10 in past dividends to DivGro's total dividend income.
Ratings and Fair Value Estimates for RTN
|†combined Value/Growth/Momentum score|
Morningstar's fair value estimate of RTN is $119.00, whereas S&P Capital IQ calculates a fair value of $131.60. According to Tipranks, based on 3 ranked analysts offering 12-month price targets for RTN, the average price target is $140.00. Finally, using a Comparative Analysis based on EBITDA, courtesy of finbox.io, RTN has a fair value estimate of $125.66 (see below).
The average of these valuations is $129.06, which means RTN is trading at a discount of about 2% to fair value.
- RTN's 10-year dividend growth rate (DGR) is a solid 11.8%. The company recently increased its quarterly dividend from 67¢ per share to 73.25¢ per share, an increase of 9.33%.
- Payout ratio is below 40% and has been consistently below 40% for 10 years.
- The company repurchased 9 million shares for $1.0 billion in 2015 and authorized an additional $2 billion in buybacks during Q4 2015. In the past decade, RTN reduced its share count by 34%!
- Analysts expect above average sales growth of 4.58%, with key drivers being RTN's Patriot missile defense system. Sales in 2016 are expected to be around $24 billion.
- With a diverse and ever-expanding product portfolio, RTN is well-positioned for future growth. Recent acquisitions in the intelligence, information and cyber warfare sector have made the company even more future proof.
What do you think of RTN as a dividend growth stock? Please share your thoughts in the comments section below.