Defense Dividends: 3 Strong Performers That Are Raising Payouts
When it comes to industry-specific performance, undoubtedly one of the most impressive showings in 2025 has come from aerospace and defense stocks. The SPDR S&P Aerospace & Defense ETF (NYSEARCA: XAR), a diversified barometer for the industry, has provided a total return of nearly 31% year to date. That far surpasses the 10% total return of the S&P 500 Index. Strong performance often leads to key events that many investors covet: dividend increases.
Below, we’ll detail three aerospace and defense stocks posting solid returns in 2025 and recently announced huge dividend boosts. All three have lifted their dividends by 20% or more, helping to significantly juice the income portion of their return profiles.
TDG Boost’s Special Dividend, Lifting Yield Above 6%
Kicking off the list is Transdigm Group (NYSE: TDG), which recently made a unique dividend announcement. On Aug. 20, the firm’s board of directors approved a substantial increase to Transdigm’s special dividend. The company has lifted this payment, which occurs once yearly, to $90 per share. This marks a significant increase of 20% compared to the company’s 2024 special dividend of $75 per share.
The new special dividend is payable on Sept. 12 to shareholders of record as of the Sept. 2 close. Investors should note that Transdigm only pays a special dividend and does not pay regular quarterly dividends.
Despite this, the stock still has a substantial indicated dividend yield, which rises to 6.4% with the firm’s latest increase. This comes as shares have appreciated nearly 10% in 2025.
Additionally, Wall Street analysts are relatively bullish on this stock. The MarketBeat consensus price target on Transdigm is just under $1,625, implying around 17% in shares.
Transdigm’s latest special dividend is nearly five times larger than the $18.50 special dividend the firm paid in 2022. This suggests that further increases would not be surprising.
ESLT Raises Dividend 20% After Massive Rally
Next up is Elbit Systems (NASDAQ: ESLT), a stock that has managed to provide a total return of 78% in 2025. In conjunction with releasing its latest financials on Aug. 13, the firm declared a new quarterly dividend of 75 cents per share.
That marks a 25% increase from its previous dividend of 60 cents. Elbit will pay the new dividend on Oct. 27 to shareholders of record on Oct. 14. The stock now has an indicated dividend yield of approximately 0.65%.
Despite announcing its second dividend increase in the last 12 months, the stock’s yield is down considerably as shares have soared. Shares have appreciated around 131% over that period, while the stock’s yield has fallen from around 1% at the start.
Currently, MarketBeat only tracks one Wall Street analyst who covers the stock. However, even with Elbit’s surge, Bank of America sees room for the rally to continue. Their $500 price target implies around 9% upside in shares.
Howmet Lifts Dividend for Third Time in Less Than Two Years
Last up is Howmet Aerospace (NYSE: HWM), with a total return of nearly 57% in 2025. In the company’s latest financial results, released on July 31, Howmet reported record revenue and profit.
The firm also announced a substantial 20% increase to its quarterly dividend, which now stands at 12 cents per share.
The record date for the most recent payment has already passed.
However, investors should expect a 12-cent or higher payment in future quarters, as this is the third time since the beginning of 2024 that the firm has raised its quarterly dividend.
Still, dividends remain a relatively minor part of the stock’s return profile, with Howmet's indicated dividend yield of just under 0.3%.
Defense Dividends Show the Industry’s Strength
Clearly, these three firms are feeling good about their businesses, which allows them to pay out more cash to shareholders.
These increased commitments are just one factor demonstrating the strength of the defense industry right now.
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