Raytheon Co. (RTN) will increase its annual dividend 16%, extending its streak of higher shareholder payouts for the eighth straight year.
The 28-cent increase, to $2 a share, will cost the company about $95 million more each year. Raytheon on Wednesday also declared a 50-cent quarterly dividend as part of the increase. The company's quarterly payouts are subject to authorization by its board.
The defense company's raised dividend follows a series of similar increases from a wide range of companies in recent months. Many corporations have boosterd payouts to investors of late to reassure them about future business prospects.
Raytheon and other defense companies have been diversifying into growing areas such as cybersecurity and seeking international growth in response to lean U.S. defense spending. The company's latest fourth-quarter profit improved--despite weaker revenue--due to lower costs.
"This dividend increase reflects our confidence in the company's future, and represents our continued dedication to a balanced capital deployment strategy made possible by Raytheon's strong financial position," Chairman and Chief Executive William H. Swanson said.
Shares were up 1.6% at $52.31 after hours. The stock had climbed 9.3% over the past three months through Wednesday's close.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com