Harris Corp. (HRS) Scales 52-week High On Dividend Hike

Shares of leading communications equipment and service provider Harris Corp. (NYSE:HRS) scaled a 52-week high of $92.91 on Aug 30, before settling a tad lower at $92.73. The Melbourne, FL based company has a market capitalization of $11.57 billion. Average volume of shares traded over the last three months is approximately 737.23 K.

6% Dividend Hike Leads to Stock Price Surge

The company raised its quarterly dividend to 53 cents per share ($2.12 per share annualized), representing an increase of 6% over the previous payout of 50 cents per share. The new dividend, which has been approved by the company’s board of directors, is payable on Sep 21 to shareholders of record as of Sep 9, 2016.

We believe that the dividend hike not only highlights Harris Corp.’s commitment to create value for shareholders but also underlines the company’s confidence in its business going forward. It is evident from past records that Harris Corp. has a stable dividend payment history.

Earnings Beat in Q4

The company reported better-than-expected earnings in the fourth quarter of fiscal 2016 (ended Jul 1, 2016). Earnings also improved 9.9% on a year-over-year basis. Performance in the quarter was boosted by the inclusion of Exelis' results. The acquisition of Exelis was completed in late May 2015.

Harris Corp. has an impressive earnings history having outshined the Zacks Consensus Estimate in each of the last four quarters. The average earnings beat was 4.04%.

Multiple Contract Wins

The company has won multiple contracts of late which should boost its top line. In Jun 2016, the company received a military contract worth $1.7 billion. As a leading government electronics supplier, Harris Corp. is benefiting from the increase in U.S. defense expenditures as well as strong market conditions for RF (radio frequency) communications.

In order to boost operating efficiency through the optimization of its business portfolio, the company sold its Aerostructures business to Albany International Corp. for an enterprise value of $210 million, earlier in the year. As per the agreement, Albany International paid $187 million in cash and the remaining $23 million as capitalized lease.

At present, Harris Corp. has a Zacks Rank #4 (Sell).

Stocks to Consider

Better-ranked stocks in the broader Computer & Technology sector include ARRIS International plc (NASDAQ:ARRS) , Carbonite, Inc. (NASDAQ:CARB) and Facebook, Inc. (NASDAQ:FB) . All 3 stocks carry a Zacks Rank # 1 (Strong Buy).

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