Lockheed Martin, Interactive Brokers, AEP Hike Dividends on Strong Growth

Key Points

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Lockheed Martin, Interactive Brokers, and American Electric Power all raised dividends recently while maintaining forward payout ratios near or below 60%.
Lockheed Martin boosted its dividend 4.4% to $3.60 quarterly, backed by a record $292 billion backlog and a four-times book-to-bill ratio.
Interactive Brokers raised its dividend more than 70% to 15 cents quarterly, and analysts see the most upside for the stock among the three companies.

Stock market giants across several key sectors just announced notable dividend increases. This includes a defense behemoth, a top financial services name, and one of the largest players in the utilities sector. Furthermore, after boosting their dividends, all three names have forward payout ratios near or below 60%, indicating solid dividend sustainability and providing potential for future increases.

Lockheed Martin Ups Payout as Backlog Hits New Record

Lockheed Martin (NYSE: LMT) is one of the world’s largest players in the defense industry, with a market capitalization near $140 billion. The stock has delivered a strong return of about 25% in 2026, with shares popping 7% the day after its latest earnings report.

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The company beat estimates on both sales and earnings per share (EPS), and its backlog soared 63% year-over-year (YOY) to a record $292 billion. It highlighted its four-times book-to-bill ratio, showing that orders far exceeded revenue, supporting future sales growth.

Lockheed Martin also recently increased its dividend by 4.4%, lifting its quarterly payout to $3.60. The firm plans to make its next payment on Dec. 31 to shareholders of record as of the Dec. 1 close. The stock’s forward dividend yield now sits near 2.5%. Notably, this is one of the highest yields among aerospace and defense stocks in the S&P 500 Index.

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Lockheed Martin is also in a strong position regarding dividend sustainability. The firm’s payout ratio is approximately 51%, putting its earnings well above its dividend payments. Analysts also expect this ratio to improve meaningfully to less than 42%, based on next year’s earnings estimates.

Interactive Brokers Issues Massive Dividend Increase

Interactive Brokers Group (NASDAQ: IBKR) is a major player in the financial services sector, with a market capitalization near $140 billion. Shares of the trading platform and broker have gained more than 25% in 2026. The company experienced strong account growth in its latest quarter of 35% YOY, with total accounts increasing to 5.58 million. Meanwhile, pre-tax profit hit a record $1.45 billion, with Interactive Brokers posting a pre-tax margin of 78%.

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Interactive Brokers cited these factors in its decision to issue a huge dividend increase of more than 70%. The company’s quarterly payout will increase to 15 cents per share, with the firm planning to make its next payment on Dec. 14 to shareholders of record as of Dec. 1.

The increase lifts the stock’s forward dividend yield to approximately 0.7%. While this is a relatively low yield, Interactive Brokers’ low payout ratio gives it ample headroom for further increases. Even after this boost, the company’s payout ratio is just 23% based on the last 12 months’ earnings.

American Electric Power’s Yield Hits 3% as Data Center Demand Soars

Last up is American Electric Power (NASDAQ: AEP). With a market capitalization of just under $70 billion, AEP ranks among the top five most valuable stocks in the S&P 500 utilities sector. AEP shares are up more than 10% in 2026, and adding in the company’s dividend lifts its total return to nearly 15%.

The AI buildout has been a boon for AEP, helping lift the firm’s contracted large-load capacity additions to 69 GW through 2030. It notes that around 90% of this comes from data centers and crypto customers. Amid this, the company expects its operating EPS to grow by a solid compound annual growth rate of more than 9% through 2030.

AEP has also issued a slight 2% dividend increase, lifting its quarterly payout to 97 cents per share. The payable date for its next dividend is Dec. 10, and the record date is Nov. 10. This small increase supports AEP’s already sizable yield, which now sits at approximately 3% on a forward basis.

Additionally, the company’s dividend sustainability is on strong footing. Its payout ratio based on last 12 months’ earnings is approximately 65%, and analysts expect this figure to decline to 55% based on next year’s estimates.

Analysts Eye Solid Gains for Interactive Brokers, Founder Dismisses Dividend Cut

Looking ahead, analysts project the most upside for Interactive Brokers in this group, based on 12-month price targets. The MarketBeat consensus price target of $103 implies upside of more than 25%.

One key item for investors to be aware of is Interactive Brokers’ dividend policy. The company generally follows a guideline of paying a dividend of between 0.5% and 1% of the firm’s market value. With shares up more than 100% in the past two years, the company’s latest increase helped it “catch up” with respect to this guideline. In turn, further increases will be somewhat tied to the stock’s future appreciation.

Additionally, when asked whether a decline in the company’s value could result in a dividend cut, founder and chairman Thomas Peterffy said, “I don’t think that we will ever cut the dividend, at least not in any situation that I can imagine sitting here right now.” This statement suggests that Interactive Brokers is maintaining a floor on its dividend while preserving upside to its payout.

The article “Lockheed Martin, Interactive Brokers, AEP Hike Dividends on Strong Growth” was originally published by MarketBeat.

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