L3Harris Stock (LHX) Climbs as Quarterly Dividend Raised

L3Harris Technologies stock (NYSE:LHX) edged 0.3% higher at the open today, extending a robust rally that has seen shares climb approximately 17% since the start of the year. The aerospace and defense contractor announced that its board of directors had approved an increase in the quarterly cash dividend to $1.25 per share from $1.20, marking yet another step in the company's long-standing commitment to shareholder returns.

The enhanced dividend, which represents a 4.2% increase, will be payable on March 20 to shareholders of record as of March 6. The move raises L3Harris's annualized dividend rate from $4.80 to $5.00 per share, continuing a remarkable streak of consistent dividend growth that has become a hallmark of the company's capital allocation strategy.

This latest increase represents the company's 25th consecutive annual dividend raise, a track record that places L3Harris among the more reliable dividend growers in the defense sector. The February 2025 increase had lifted the quarterly payout from $1.16 to $1.20 per share, a 3.4% bump that demonstrated management's confidence in the company's cash generation capabilities. The acceleration to $1.25 per share less than a year later underscores the strength of L3Harris's financial position amid a favorable operating environment for defense contractors.

Markets have rewarded L3Harris handsomely over the past year, with the stock currently trading at $355.75 as of late January 2026. This represents a substantial advance from the $306.23 all-time high reached in October 2025, which itself marked a 26.17% gain over the prior year and a 45.49% year-to-date return at that time. The continued upward trajectory reflects sustained investor confidence in the company's strategic positioning within the defense industrial base.

The strong stock performance comes against a backdrop of elevated global defense spending, as geopolitical tensions and modernization programs drive demand for sophisticated military technology. L3Harris, which specializes in communications systems, electronic warfare, and space capabilities, has positioned itself as a critical supplier to the U.S. Department of Defense and allied nations. The company's integrated mission systems and space superiority offerings have benefited from multi-year procurement cycles and long-term contracts that provide revenue visibility.

The dividend increases also signal management's confidence in the sustainability of the company's cash flows. Defense contractors typically generate substantial free cash flow due to the nature of government contracts, which often include progress payments and favorable working capital dynamics. L3Harris has demonstrated disciplined capital allocation, balancing investments in research and development, strategic acquisitions, and shareholder returns through both dividends and share repurchases.

Analyst Summary: Bull and Bear Cases

The combination of steady dividend growth and significant capital appreciation has made L3Harris an attractive holding for income-focused investors seeking exposure to the defense sector. The current yield, while modest given the stock's appreciation, is backed by a payout supported by predictable government revenues. Markets appear to be pricing in continued strong performance as defense budgets remain elevated and L3Harris executes on its strategic priorities, suggesting the positive momentum may persist into 2026.