NEW YORK - RTX Corp (NYSE:RTX), born from the merger of United Technologies (NYSE:RTX) and Raytheon (NYSE:RTN), has announced a dividend of $0.59 per share, scheduled for payment on December 14, 2023. Investors must own the stock by the ex-dividend date of November 16, 2023, to be eligible for this payout. The company's operations span across its Collins Aerospace, Pratt & Whitney, and Raytheon divisions.
Despite a long-standing tradition of quarterly dividends dating back to 1985, RTX Corp faces scrutiny over the sustainability of its payouts. The company's dividend yield over the past 12 months is reported at 2.85%, with an anticipated forward yield of 2.95%. Yet, the firm's dividend growth has been on a decline, with an annual reduction of -9.80% over the past three years and -6.90% per year over the last five years.
As of September 30, 2023, RTX Corp's dividend payout ratio stood at 1.05, a figure that often signals potential risk to the dividend's future if earnings don't sufficiently cover the distributions to shareholders. This is coupled with a profitability rank of 6 out of 10, which acknowledges RTX Corp's consistent net profits over the previous decade but also flags potential concerns.
The company's growth metrics have earned it a growth rank of 6 out of 10, indicating moderate prospects for future expansion. However, RTX Corp's average annual revenue growth rate has decreased by -4.90%, placing it behind approximately 71.32% of global competitors. Additionally, its earnings growth rate lags at an average annual decrease of -4.70%, trailing around 62.56% of global peers.
While RTX Corp maintains a record of consistent dividend payments with a reasonable yield, the negative trends in dividend growth and a high payout ratio raise questions about the long-term viability of such dividends against the backdrop of its financial performance and market standing.
InvestingPro Insights
Insights from InvestingPro indicate that RTX Corp is a prominent player in the Aerospace & Defense industry, maintaining a market cap of $115.76B. They have consistently paid dividends for 53 consecutive years, a testament to their financial resilience. This aligns with the company's dividend yield of 2.92% for 2023, and a commendable dividend growth of 7.27% in the last twelve months as of Q3 2023.
InvestingPro Tips suggest that RTX Corp is trading at a high earnings multiple, with a P/E ratio of 36.97, and a slightly higher P/E ratio of 37.82 in the last twelve months as of Q3 2023. Despite some analysts revising their earnings downwards for the upcoming period, the company is predicted to remain profitable this year, following a profitable streak over the last twelve months. It's worth noting that InvestingPro offers more tips and data for those interested in a more in-depth analysis.
In conclusion, while RTX Corp faces some challenges, the company's consistent dividend payments and profitability indicate a promising outlook. As always, investors should consider these insights in the context of their individual investment strategies.
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