Why Raytheon Technologies is Good Dividend Growth Stock to Add to Your Portfolio

NYSE: RTX | Raytheon Technologies Corp. News, Ratings, and Charts

RTX – Aerospace and defense company Raytheon Technologies’ (RTX) operational performance has helped it witness robust revenue growth in the last reported quarter. Given the company’s solid growth prospects and track record of increasing dividend payouts, it could be wise to add the stock to your portfolio. Read on.

Raytheon Technologies Corporation (RTX) is an aerospace and defense corporation that delivers innovative technologies and services worldwide to commercial, military, and government clients. With four industry-leading companies, Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense, RTX delivers solutions that push the frontiers in avionics, cybersecurity, directed energy, electric propulsion, hypersonic, and quantum physics.

RTX’s dividend payouts have grown at a CAGR of 4% over the past five years. While its four-year average dividend yield is 2.39%, its current dividend translates to a 2.37% yield. It paid a $0.51 per share quarterly dividend on December 16, 2021. The stock has gained 20.4% over the past year and 1% over the past six months to close the last trading session at $86.06.

Recently, the company’s Board of directors has authorized a share repurchase program of $6 billion of its outstanding common stock. This exhibits RTX’s robust cash flow generating capabilities.

Here’s what could shape RTX’s performance in the near term:

Positive Developments

Last month, the Missile Defense Agency (MDA) chose RTX as one of the companies to build and test the first interceptor, particularly intended to resist hypersonic threats. The Glide Phase Interceptor (GPI) weapon will counter a new generation of hypersonic missiles – weapons that move faster than the speed of sound and maneuver rapidly in flight.

Also, last month, Blue Canyon Technologies LLC, a wholly-owned subsidiary of RTX, was selected by Ball Aerospace to create a standardized X-SAT Venus ESPA-class microsatellite bus and numerous unique components for a forthcoming one-of-a-kind mission with NASA for the Solar Cruiser project.

Robust Financials

During the third quarter ended September 30, 2021, RTX’s net sales increased 9.9% year-over-year to $16.21 billion. Its operating income increased 209.4% year-over-year to $1.34 billion. The company’s net income grew 427.7% from the year-ago value to $1.39 billion, while its EPS grew 447.1% from the prior-year quarter to $0.93.

Impressive Growth Prospects

The consensus revenue estimate of $16.65 billion for the next quarter (ending March 2022) indicates a 9.2% improvement year-over-year. Analysts expect RTX’s EPS to rise 18% from the same period last year to $1.12 next quarter.

Street expects RTX’s revenues and EPS to rise 54.6% and 13.1% year-over-year to $64.62 billion and $4.22, respectively, in the fiscal year 2021. In addition, RTX’s EPS is expected to rise at a 22.8% CAGR over the next five years. Moreover, the company has an impressive earnings surprise history, as it topped Street EPS estimates in all of the trailing four quarters.

Consensus Rating and Price Target Indicate Potential Upside

Each of the three Wall Street analysts that rated RTX have rated it Buy. The 12-month median price target of $101.67 indicates an 18.1% potential upside. The price targets range from a low of $100.00 to a high of $105.00.

POWR Ratings Reflect Solid Prospects

RTX has an overall grade of B, equating to a Buy rating in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight different categories. RTX has an A grade for Growth and a B for Stability. RTX’s solid earnings and revenue growth potential is consistent with the growth grade. And the stock’s relative stability compared to the broader market is in sync with the Stability grade.

Of the 73 stocks in the D-rated Air/Defense Service industry, RTX is ranked #15.

Beyond what is stated above, we have graded RTX for Sentiment, Value, Quality, and Momentum. Get all RTX ratings here.

Bottom Line

RTX is currently trading 6.8% below its 52-week high of $92.32, which it hit on October 22. However, the company has solid fundamentals and holds the potential to keep increasing its dividend payments. Moreover, it is projected to benefit from the growing demand across its commercial aerospace and defense businesses. So, we think it could be wise to add the stock to your portfolio now.

How Does Raytheon Technology Corporation (RTX) Stack Up Against its Peers?

RTX has an overall grade of B in our proprietary rating system. This rating is superior to its peers in the Air/Defense Service industry, such as Atlas Air Worldwide Holdings (AAWW), NAPCO Security Technologies Inc. (NSSC), and Woodward Inc. (WWD), which have a C (Neutral) rating.


RTX shares were trading at $86.83 per share on Monday morning, up $0.77 (+0.89%). Year-to-date, RTX has gained 24.37%, versus a 28.91% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
RTXGet RatingGet RatingGet Rating
AAWWGet RatingGet RatingGet Rating
NSSCGet RatingGet RatingGet Rating
WWDGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Bulls in Charge…for Now at Least

Every since the S&P 500 (SPY) made new lows in mid June the bulls have been back in charge. At first it looked like your typical bear market rally. However, there are more and more signals going off that this may be the real deal. As in the new bull market may have arrived. That topic is a big deal as one's outlook, bullish or bearish, weighs heavily on how they construct their portfolio for the days and weeks ahead. That is why we will focus on that topic in today's commentary. Read on below for more…

:  |  News, Ratings, and Charts

The 3 Best Nasdaq 100 Stocks to Buy Now

The significant improvement in the inflation story has boosted investors’ confidence. However, market volatility is rife, and despite the uncertainties, the Nasdaq 100 has witnessed significant gains. Therefore, quality Nasdaq 100 stocks Johnson & Johnson (JNJ), Procter & Gamble (PG), and Novo Nordisk (NVO) could be ideal additions to your portfolio now. Let’s discuss the stocks in detail…

:  |  News, Ratings, and Charts

How to RIDE the Next Bull Market?

Growth stocks are back! And, they are leading the S&P 500 (SPY) higher after the brutal bear market investors experienced this year. Read on to find out the best strategy to profit from the next big bull market in growth stocks...

:  |  News, Ratings, and Charts

2 REITs to Buy and Hold for Decades

Despite the macroeconomic headwinds, real estate investment trusts (REITs) are expected to remain resilient due to rising demand, appreciation of property prices amid the high inflation, and increasing rental income. Moreover, REITs are considered ideal investments in uncertain market conditions since they pay out at least 90% of their income as dividends. So, quality REITs LTC Properties (LTC) and Getty Realty (GTY) could be ideal investments to survive the short-term market fluctuations and create solid long-term returns. Continue reading…

:  |  News, Ratings, and Charts

How to RIDE the Next Bull Market?

Growth stocks are back! And, they are leading the S&P 500 (SPY) higher after the brutal bear market investors experienced this year. Read on to find out the best strategy to profit from the next big bull market in growth stocks...

Read More Stories

More Raytheon Technologies Corp. (RTX) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All RTX News