Monday, October 3, 2011

Dividend Machine for October 3, 2011 Raytheon, symbol RTN

President Dwight D. Eisenhower, Oval OfficeImage via Wikipedia

Dividend Machine for October 3, 2011 Raytheon, symbol RTN

                Beware of the military industrial complex said President Eisenhower.  As income investors, who are we to fight an uphill battle?   Raytheon, symbol RTN like NOC see my post on NOC and LMT see my post on LMT is a dividend machine.  

When I was in “the business”, I liked to suggest to my clients a troika (three companies) of income stocks just to cover all bases.   For instance, I might choose three industrials, three chemicals, three pharmas,    or three banks depending on the client's needs. That strategy worked out well.
  Sometimes we held all three and sometimes we pared our holdings when we set stops or had covered calls taken or some fundamental change occurred in a company (for instance if they took on too much debt or cut their dividend) that forced us to sell.   With that experience in my pocket, I am not uncomfortable with profiling the third industrial that specializes in defense.  Raytheon, symbol RTN is the third in our troika of military/industrial companies.  Besides, RTN employs 72,000 people and that is a lot of jobs.

RTN has increased the dividend every year for at least five years.  You have to hurry to get the most recently declared quarterly dividend of $.43 per share as it goes ex-dividend on October 5, 2011.  In other words, you have to own the shares by October 5 in order to receive the $.43 dividend on November 3, 2011.  

RTN closed on Friday, September 30, 2011 at $40.87; the company earns $5.47 per share per year.  The annual dividend of $1.72 is a 4.21 percent dividend yield.  Their debt to equity ratio is a mere .35, which is very respectable for a company with such a need for capital.

Consider RTN for the income-producing portion of your income-investing portfolio.

Very Truly Yours,
A new dividend machine every Monday with ideas and commentary on income investing through the week.
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