July 03, 2025 a 11:31 am
RTX: Dividend Analysis - RTX Corporation
RTX Corporation, a prominent player in the technology and industrial sectors, boasts a robust dividend profile with a rich history of consistent payouts spanning 56 years. This signifies a strong commitment to returning capital to shareholders, enhancing investor confidence and potentially stabilizing portfolio returns. While the recent dividend yield of 1.94% may appear modest relative to peers, the corporation’s strategic focus on innovation and financial stability positions it well for future growth. Understanding RTX's dividend landscape is crucial for evaluating its potential in income-focused investment strategies.
📊 Overview
RTX Corporation has demonstrated a steadfast commitment to dividends, reflected in its impressive 56-year history of payments without suspension. The dividend yield stands at 1.94%, with a current dividend per share of 2.41 USD. This steady history highlights RTX's focus on shareholder returns, a vital consideration for investors prioritizing income stability and growth.
| Metric | Details |
|---|---|
| Sector | Technology and Industrials |
| Dividend yield | 1.94 % |
| Current dividend per share | 2.41 USD |
| Dividend history | 56 years |
| Last cut or suspension | None |
🗣️ Dividend History
The detailed history of dividend payments underscores RTX's reliability in providing consistent returns to shareholders. This track record not only signals financial stability but also builds investor trust. Hence, long-term investors can find comfort in this reliability.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.31 |
| 2024 | 2.48 |
| 2023 | 2.32 |
| 2022 | 2.16 |
| 2021 | 2.005 |
📈 Dividend Growth
Dividend growth indicates RTX's potential for increasing shareholder returns over time. With growth rates of 7.34% over 3 years and 6.03% over 5 years, RTX demonstrates moderate but steady growth in its dividends.
| Time | Growth |
|---|---|
| 3 years | 7.34 % |
| 5 years | 6.03 % |
The average dividend growth is 6.03% over 5 years. This shows moderate but steady dividend growth, suggesting potential for long-term income increase for investors.
📉 Payout Ratio
The payout ratio provides insight into RTX's dividend sustainability. With an EPS-based payout ratio of 70.20% and a free cash flow-based payout ratio of 62.44%, RTX maintains a sound balance between returning cash to shareholders and retaining earnings for growth initiatives.
| Key figure | Ratio |
|---|---|
| EPS-based | 70.20 % |
| Free cash flow-based | 62.44 % |
The payout ratios suggest a prudent approach to dividend distribution, balancing immediate shareholder returns with the company's longer-term financial health.
✅ Cashflow & Capital Efficiency
Cash flow analysis is crucial as it depicts RTX's ability to sustain its dividend payments and invest in growth. The free cash flow yield, backed by operating cash flow ratios, highlights RTX's capital efficiency and potential for future payments.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.94 % | 3.93 % | 2.95 % |
| Earnings Yield | 3.10 % | 2.66 % | 3.49 % |
| CAPEX to Operating Cash Flow | 36.37 % | 40.16 % | 38.71 % |
| Stock-based Compensation to Revenue | 0.54 % | 0.62 % | 0.63 % |
| Free Cash Flow / Operating Cash Flow Ratio | 63.33 % | 59.84 % | 61.29 % |
RTX demonstrates strong capital efficiency, with stable free cash flow supporting its dividend payments while maintaining reinvestment into business growth.
⚠️ Balance Sheet & Leverage Analysis
RTX's balance sheet highlights its ability to manage debt effectively, with ratios indicating a stable financial footing. Such financial health is pivotal for sustaining dividends.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 71.30 % | 75.65 % | 46.12 % |
| Debt-to-Assets | 26.34 % | 27.95 % | 21.09 % |
| Debt-to-Capital | 41.62 % | 43.07 % | 31.56 % |
| Net Debt to EBITDA | 3.07 | 4.02 | 2.44 |
| Current Ratio | 0.99 | 1.03 | 1.08 |
| Quick Ratio | 0.74 | 0.78 | 0.81 |
| Financial Leverage | 2.71 | 2.71 | 2.19 |
With an improving debt profile, RTX showcases strong financial stability essential for steady dividend payments, enhancing investor confidence.
📉 Fundamental Strength & Profitability
Fundamentals are the backbone of any financial analysis, indicating a company's long-term profitability and operational efficiency. RTX's ratios exhibit sound profitability metrics.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 7.94 % | 5.34 % | 7.15 % |
| Return on Assets | 2.93 % | 1.97 % | 3.27 % |
| Margins: Net, EBIT, EBITDA, Gross | 5.91 %, 9.98 %, 15.07 %, 19.08 % | 4.63 %, 7.96 %, 13.95 %, 17.54 % | 7.75 %, 11.06 %, 16.66 %, 20.38 % |
| Research & Development to Revenue | 3.63 % | 4.07 % | 4.04 % |
RTD shows robust profitability across all fundamental metrics, supporting its ongoing capacity to deliver sustainable dividends.
📈 Price Development
✅ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend yield | 3 | |
| Dividend Stability | 5 | |
| Dividend growth | 4 | |
| Payout ratio | 3 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 32/40
🗣️ Rating
RTX Corporation scores a commendable 32 out of 40 in our Dividend Scoring System, reflecting strong dividend stability, growth prospects, and financial health. The company's commitment to maintaining a consistent dividend policy, coupled with its robust financial metrics, makes it an attractive option for income-focused investors looking for reliability and modest growth in dividend yields. As such, I would rate RTX as a "Buy" for investors seeking stability with potential for dividend growth.