RTX shares closed at $198.66 on Friday, marking a 1.4% gain, after the company declared a quarterly cash dividend of $0.68 per share. The dividend is scheduled for payment on March 19 to shareholders of record as of February 20.
Pentagon Review Looms
The U.S. Department of Defense is expected to release a list early next week identifying contractors that may face limitations on dividends and stock buybacks. This follows an executive order issued on January 7. Companies placed on the list would have 15 days to submit board-approved remediation plans, with potential enforcement actions including contract terminations.
RTX's Raytheon segment has been specifically cited as "least responsive" to Pentagon requirements. The broader defense sector, including major firms like Lockheed Martin, Northrop Grumman, General Dynamics, and L3Harris, has returned approximately $18 billion to shareholders over the past year, according to Morgan Stanley data.
Market Implications
The potential restrictions arrive at a sensitive time for defense investors, who often view these stocks as reliable income sources. Any perceived threat to payouts could alter how the sector is valued, even as national defense spending remains robust. The criteria for determining "underperformance" and whether restrictions would be automatic or negotiated remain unclear.
Some investment managers have expressed concern that caps on executive compensation and limits on capital returns could reduce overall investor yields and complicate talent recruitment. RTX CEO Christopher Calio has reiterated the company's commitment to its dividend, which has been paid annually since 1936.
Analysts note that the immediate market focus will be on the Pentagon's list and its specific terms. Defense stocks often trade in tandem during periods of sector-wide news, suggesting potential volatility when U.S. markets reopen on Monday, February 9. The situation will evolve as the list is published and companies respond.