Aware that global tensions show few signs of tapering off anytime soon, investors have taken particular note of defense businesses like L3Harris Technologies (LHX -0.8%), a leading defense contractor offering solutions for space, air, land, sea, and cybermilitary settings.
The company is now known for its advanced technology that underpins sophisticated solutions, including autonomous systems and missile warning and defense networks. However, L3Harris has a history that stretches back more than 130 years and is grounded in much simpler technology -- sheet feeders for printing presses.
It's important to recognize that while L3Harris is a major defense contractor, it's also committed to the civilian sector. Though it plans to divest its commercial aviation solutions business, it still engages in non-defense-related businesses, such as manufacturing maritime drones for the energy industry and rocket engines for space exploration.
There are some important considerations for investors looking to strengthen their holdings with L3Harris stock. Those include how to buy shares, whether the company is profitable, its dividend structure, and alternative investment opportunities.
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How to buy
How to buy L3Harris Technologies stock
Maybe you've built a strong portfolio, or maybe buying shares of L3Harris will be the first step on your investing journey, or maybe you're somewhere in between. Regardless of your level of investing experience, there are some basic steps to gain exposure to L3Harris, which trades under the stock ticker LHX.
- Open your brokerage app: Log into your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected, and adjust your investment strategy accordingly.
Should I invest?
Should I invest in L3Harris?
Although there's no blanket answer to every investor's question of whether L3Harris is a worthwhile investment, several factors can help individuals decide whether scooping up shares of L3Harris is a smart move for them.
For one, investors interested in a defense company that generates passive income will find L3Harris compelling. As of January 2025, L3Harris stock offered a forward yield of 2.2% -- one of the higher yields found among aerospace and defense stocks. And it's not only the higher yield that makes the stock look appealing. Over the past 10 years, L3Harris has averaged a conservative payout ratio of 72%.
Investors looking to expand their coverage to drone stocks will also find L3Harris attractive. In addition to the drones it manufactures for civilian and commercial customers, L3Harris designs drones for military use.
The company's FVR, for example, is a vertical take-off and landing drone, while the company also has an uncrewed service vehicle (USV) designed for maritime operations. The U.S. Navy awarded L3Harris a $35 million initial award for its USV in 2020.
L3Harris is also growing its presence in space, making the company a draw for those seeking exposure to the burgeoning space economy. In addition to the engines it produces for NASA, L3Harris designs and builds satellites for the military. In December 2024, the company reported that the Space Development Agency, a unit of the United States Space Force, had provided it with contract awards for 38 satellites.
Profitability
Is L3Harris profitable?
One of the most pressing concerns for investors who are investigating potential stock picks is what appears at the bottom of the income statement. L3Harris has consistently generated a profit for the past 30 years.
In 2024, L3Harris reported diluted earnings per share (EPS) of $7.87. Investors digging into the company's past performances will notice a 22.2% increase over the $6.44 in diluted EPS it booked in 2023. With regards to 2025, L3Harris foresees continued growth in profits. Management projects 2025 non-GAAP (adjusted) diluted EPS of $10.55 to $10.85. Should it achieve the midpoint of this guidance, it will represent year-over-year growth of 10%.
Dividends
Does L3Harris pay a dividend?
For the past 23 consecutive years, L3Harris has rewarded shareholders with an increasingly higher dividend. Returning $4.64 in dividends to shareholders in 2024, L3Harris has hiked its dividend at a 10% compound annual growth rate over the past 10 years.
Taking a judicious approach to its dividend, L3Harris has set a target of paying out 35% to 40% of its free cash flow to shareholders.
ETF options
ETFs with exposure to L3Harris
For investors interested in a broader exposure to defense stocks, a defense exchange-traded fund (ETF) that includes L3Harris among its holdings is a great choice. The iShares U.S. Aerospace & Defense ETF (ITA -0.43%), for example, has L3Harris as its ninth-largest position, with a 3.9% weighting. With a 0.4% expense ratio, the iShares U.S. Aerospace & Defense ETF makes quarterly distributions.
Exchange-Traded Fund (ETF)
For investors more drawn to the company's focus on the final frontier, the ARK Space Exploration & Innovation ETF (ARKX -1.78%) may be a more attractive option. The ETF, which typically has between 35 and 55 holdings, focuses on companies operating in various capacities throughout space.
As of early January 2025, L3Harris had a 3.4% weighting in the portfolio. The ARK Space Exploration & Innovation ETF has a 0.75% expense ratio.
Stock splits
Will L3Harris stock split?
Numerous companies split their stocks in 2024, and various stocks seem like strong candidates to split their stocks in 2025. L3Harris probably won't be one of them.
Frequently, companies will decide to split their stocks when the share prices soar to a price that may prevent investors from buying individual shares. With L3Harris trading between about $200 and $260 in 2024, it seems unlikely that management will find it advantageous to split the company's stock.
Related investing topics
The bottom line on L3Harris
For those looking to secure their portfolios with a stalwart defense contractor, L3Harris demands attention. However, it's not only the company's defense expertise that will attract investors.
It is also a great drone stock and a worthwhile space stock. And making it even more alluring, the company's dedication to rewarding shareholders suggests L3Harris is a worthy option for investors targeting an income investment.
FAQ
Investing in L3Harris FAQ
Is L3Harris a good investment?
There's no single stock that is unilaterally good for every investor. However, there are a variety of reasons investors might find L3Harris a worthy addition to their holdings.
Is L3Harris publicly traded?
L3Harris is a publicly traded company listed on the New York Stock Exchange under the ticker LHX.
How does L3Harris make money?
L3Harris generates revenue by providing defense solutions used in various environments: air, space, maritime, land, and cyber. Additionally, the company provides solutions for civilian and commercial customers.
What is the ticker for L3Harris?
L3Harris trades on the New York Stock Exchange under the ticker symbol LHX.
