Aerospace and defense giant (NYSE: RTX) has a sustainable dividend and plenty of potential to increase it. The company offers exposure to the cyclical aerospace sector alongside the stability of the defense sector. It's a compelling mix because each side of the business can support the other when it needs cash flow to support investments in long-term growth.

In a display of confidence in its long-term prospects, management raised its quarterly dividend from $0.63 per share to $0.59 per share in early May. Annualizing that dividend means a yearly dividend of $2.52 per share. Meanwhile, management's full-year guidance calls for $5.35-$5.45. As such, RTX plans to pay out about 47% of its earnings in dividends in 2024.

Free cash flow (FCF) also accounts for capital investment and represents the flow of cash available to make share buybacks and dividends. It's probably a better way to look at dividend cover. Still, here again, RTX looks to have a well-covered dividend.

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Source Fool.com