Many companies choose to pay shareholders dividends during the months of March, June, September and December.  In September alone, more than 750 companies will pay investors who hold their shares.  In October, the number of companies handing out cash drops to 560.  By November, that total drops to 465.  Investors who would like extra income from now until the end of the year could do well by buying shares of a company that pays a dividend during the 3rd, 6th, 9th and 12th month of the year.  By doing so, not only would they lock in a dividend payment in September, but in December as well.

That being said, investors would be foolish to buy shares of a company simply because of when they pay their dividends.  A company’s fundamentals, business environment, dividend history and valuation have to be taken into account before one hits the “buy” button.  One of my favorite companies right now that checks all of these boxes, and just happens to be paying a dividend in September, is Lockheed Martin (LMT).

Company Background and Current Business Environment

With $51 billion in sales in 2017, Lockheed Martin is the world’s largest defense contractor.  The U.S. Department of Defense accounts for 60% of the company’s revenues, with the remainder split between several different U.S.  agencies and foreign governments around the world.

Lockheed Martin consists of four divisions: Aeronautics, which houses fighter aircraft like the F-35, Rotary & Mission Systems, which produces naval electronics and the Sikorsky helicopters that the company purchased from United Technologies (UTX) in 2015, Missile & Fire Control, which produces missile defense systems, and Space Systems, which create satellites.

The defense sector has been one of the hottest places to invest in recent years.  The Aerospace & Defense ETF (ITA) is up nearly 150% in the last five years.  The S&P 500 is up ~90% during this time frame.  Lockheed Martin is up nearly 210%, easily beating both the market index and the defense sector ETF.