Leading communications equipment and service provider Harris Corp. HRS, is set to end the year with a bang. In the month of December alone, the company has received over $1,033 million worth of contracts from the U.S. defence department.
Harris has a strong market position in the government communications sector, with a broad product line and an enviable win rate for government defence related communications product contracts. As a leading government electronics supplier, Harris is benefiting from the increase in U.S. defence expenditures as well as strong market conditions for RF (radio frequency) communications.
On Dec 1, Harris signed a four-year deal worth $113 million with the U.S. Naval Sea Systems Command (NAVSEA). Soon after, on Dec 7, the U.S. Army awarded the company a five-year, $800 million ceiling, multi-award IDIQ contract to provide expeditionary warfare products and services to the Army Research Lab (ARL).
Further, on Dec 17, Harris received a three-year, $54 million ceiling, single-award IDIQ contract from the U.S. Naval Research Laboratory to provide electronic warfare (EW) technology and engineering services for the Advanced Decoy Architecture Project (ADAP). Finally, on Dec 21, the company won $66 million in orders to provide a Middle East nation with Falcon III wideband tactical radios and accessories as part of an overall communications modernization effort.
Meanwhile, Harris continues to boost shareholders’ wealth by paying uninterrupted dividends through the year. In Aug 2015, the company announced a 6.4% hike in its quarterly cash dividend, raising the payout to 50 cents per share. We believe the company will continue to boost its shareholders’ wealth through regular dividend payments and robust buybacks.
Zacks Rank & Stocks to Consider
Harris currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include InterDigital Inc. IDCC, Juniper Networks Inc. JNPR and Motorola Solutions Inc. MSI. While InterDigital holds a Zacks Rank #1 (Strong Buy), both Juniper and Motorola carry a Zacks Rank #2 (Buy).
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