Daily Picks

A Dividend King, a Dividend Aristocrat, and the world’s biggest defense contractor.

Every dividend announcement prints four dates, and most investors read only the dollar amount.

Take a raise that crossed the wire last week: the declaration date is the day the board votes the money out loud. The payable date is the day it lands in your account. The record date is bookkeeping — whoever owns the shares that day gets the check. And the one that matters most is the ex-dividend date: the first morning the stock trades without the next check attached. Own it going into that morning and the money is yours, even if you sell an hour later.

Which tempts every new income investor toward the same bright idea: why not buy the day before the ex-date, collect the check, and leave? Because the market got there first. A stock the day before its ex-date is a used car with a full tank — the sticker includes the gas. On ex-morning, all else equal, the share price opens lower by roughly the amount of the dividend. The exchange literally adjusts for it. You can’t steal a dividend. You can only earn one by holding.

So what’s the calendar actually for? Logistics. It tells you which raises you can still collect and when the new money starts. And last week was a gift of a week to practice on: three healthy companies raised their dividends in three consecutive business days — Thursday, Friday, Monday — with streaks of 53 years, 24 years, and 30-plus, and three very different calendars attached. One goes ex next Tuesday. One pays on New Year’s Eve.

Let’s take them one at a time -

RPM International Inc. (RPM) — Recent Price: $97.57

Breakdown: You’ve bought RPM’s products without ever noticing the company. It owns Rust-Oleum spray paint, DAP caulk, Zinsser primer — plus the industrial side nobody sees: Tremco roofing systems, Carboline coatings, the sealants that keep stadiums and parking garages watertight.

On October 8, the board raised the quarterly dividend 5.6%, from $0.54 to $0.57. That makes RPM a Dividend King with room to spare, only 38 U.S. companies have a longer streak.

The raise came two days after a record first quarter: sales of $2.22 billion, up 4.8%, record adjusted EBITDA, and adjusted earnings up 5.3% to $1.98 a share. Meanwhile debt fell by about a quarter-billion dollars over the year, and the dividend costs only about 40 cents of every dollar of earnings.

At $97.57 the stock sits within a few dollars of its 52-week low, 20% below its high, at about 16 times next year’s expected earnings. The S&P 500: 21 times. All sixteen covering analysts land at a Strong Buy consensus, averaging $123.50 — 27% above tonight’s price.

RPM goes ex-dividend next Tuesday, October 20, and pays the new $0.57 on October 30. Own it going into the 20th and the raised check arrives this month — the shortest wait of the night.

The honest risks? Construction is the biggest segment and it’s genuinely soft — management expects it back to growth by year-end, which is a forecast, not a result. Raw-material inflation is pressuring margins, and the full-year profit outlook was trimmed at the top end.

Verdict: a 53-year raiser marked down for a construction slump its other businesses are already outrunning — with the nearest payday on tonight’s calendar.

A. O. Smith Corporation (AOS) — Recent Price: $56.60

Breakdown: A. O. Smith is America’s water-heater company. Here’s what makes that a dividend business: when a water heater dies, nobody waits for a better economy. You’re buying a new one that week. Most of its North American volume is replacement — demand that arrives on the appliance’s schedule.

On Monday, the board raised the quarterly dividend 6%, from $0.36 to $0.38. The record shows a raise every single year for over three decades and a seat among the S&P 500’s Dividend Aristocrats — plus a payout that has compounded at 12% a year for a decade, the fastest dividend growth of the night. At that pace, the income doubles roughly every six years.

A. O. Smith raised into a down year. Second-quarter sales slipped 1%, adjusted earnings fell 4%, and full-year guidance was trimmed. China — once its growth engine — saw sales drop 28% in local currency, and the company is openly running a “strategic assessment” of that business. Steel costs are squeezing margins at home while fewer new houses mean fewer first-time installations.

So why is it here? Because the payout math barely notices. The dividend costs about 40% of this year’s reduced earnings, first-half free cash flow rose 67%, covering the dividend better than twice over, and debt is a modest quarter of the capital base. North America actually grew 5%, with boiler sales up 21%. $56.60 is within a few percent of the 52-week low, 31% below the high, at under 15 times next year’s expected earnings. The thirteen covering analysts say Hold — and their average target is still $69.55, 23% above tonight’s price.

AOS goes ex-dividend October 30 and pays the new rate November 16 — with third-quarter earnings landing October 29, the day before. You’ll know whether the trough is turning before the deadline arrives.

The honest risks? China’s “assessment” could end in a write-down or an exit. Residential demand may stay soft well into 2027, steel isn’t getting cheaper, and a Hold consensus means Wall Street wants proof before it pounds the table. If earnings keep falling, this year’s comfortable coverage gets less comfortable.

Verdict: the fastest-growing dividend of the night, raised straight through a soft patch the balance sheet can afford. You’re being offered an Aristocrat at trough prices — just size it knowing the trough isn’t officially over.

Lockheed Martin Corporation (LMT) — Recent Price: $511.88

Description: Lockheed Martin is the largest defense contractor on Earth — the F-35 fighter, Patriot and THAAD missile defense, Black Hawk helicopters, military satellites. Its customer is the U.S. government and its allies, and its order book is measured in decades.

On Friday, October 9, the board raised the quarterly dividend 4.3%, from $3.45 to $3.60 — $14.40 a year, the biggest single check in tonight’s lineup — marking the 24th consecutive year of increases. This board has raised by four-to-five percent like clockwork for years.

Lockheed’s backlog hit a record $230.4 billion in July, up from $193.6 billion at New Year’s. That’s nearly three full years of revenue already under contract, including a $35 billion multi-year order for THAAD interceptors; the missiles-and-fire-control backlog nearly doubled in six months. Second-quarter sales rose 11% to $20.1 billion, and management raised full-year guidance across the board: roughly $30 a share of earnings and $7 billion-plus of free cash flow. The $14.40 dividend costs about 48 cents of each earnings dollar and under half the free cash.

The price: $511.88 is 26% below the 52-week high, about 16.5 times next year’s expected earnings against the market’s 21, with twenty-three analysts averaging a $625 target — 22% above tonight’s price.

The record date is December 1 and the check pays December 31 — buy Lockheed tonight and you’ll wait eleven weeks for your first dividend. That’s not a flaw. The ex-date decides who gets one check. The streak decides who gets the next twenty-four. Nobody who owned Lockheed for the calendar made real money; everybody who owned it for the backlog did.

The honest risks. Just last year, this same company took roughly $1.6 billion of losses in a single quarter on fixed-price programs that went sideways; that risk never fully retires in this industry. F-35 deliveries ran at less than half last year’s pace in the first six months, cash has been flattered by payment timing while inventories build, and third-quarter earnings land October 22 — six days after this letter. A stumble there, and the stock’s 26% markdown gets bigger before it gets smaller.

Verdict: the steadiest raiser of the night, backed by the largest order book in its history, at a below-market multiple. The longest wait on tonight’s calendar — and the least of your worries if you’re holding for year twenty-five.

— The Daily Wall Street Alerts Team

This newsletter is for informational purposes only and does not constitute investment advice. Always conduct your own due diligence before making any investment decisions.