LHX
L3Harris Technologies, Inc.
Industrials · Aerospace & Defense · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- Strong financial health from a low debt-to-equity ratio of 0.53 and a large asset base, combined with a near-top dividend payout ratio of 56.2%, anchor the composite score.
- Moderate but real revenue and EPS growth contribute positively, though single-digit percentage gains keep the growth score in the middle of the range.
- Below-average profitability at 3.9% ROA and a sharp 2026Q4 earnings pullback prevent the score from reaching the higher tiers, resulting in a 58.8/100 composite.
Why Not Higher
- A return on assets of only 3.9% in FY2026 reflects weak capital efficiency relative to the company's $41.2 billion asset base, dragging down the profitability component.
- The significant drop in operating income from $621 million in 2026Q3 to $393 million in 2026Q4 introduces uncertainty about earnings trajectory and tempers the momentum score.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2023 to FY2025 by 9.8% (from $19,419,000,000 to $21,325,000,000), while net income rose 6.9% from FY2025 to FY2026 and diluted EPS increased 8.4% from FY2025 to FY2026 ($7.87 to $8.53).
The model reflects moderate growth: top-line and bottom-line expansion are present but measured, with single-digit percentage gains across the cited periods, placing the score in the middle of the range.
L3Harris reported a return on assets of 3.9% in FY2026.
A 3.9% return on assets in FY2026 indicates that the company generates a relatively modest return relative to its asset base, which the model treats as below-average profitability and reflects in the sub-20 score.
In FY2026, L3Harris carried a debt-to-equity ratio of 0.53 and total assets of $41,195,000,000.
A debt-to-equity ratio of 0.53 in FY2026 suggests a relatively conservative leverage profile, and the substantial total asset base of $41,195,000,000 signals scale; together these metrics support the above-average financial health score.
Operating income rose sequentially from $525,000,000 in 2026Q1 to $571,000,000 in 2026Q2 and $621,000,000 in 2026Q3 before declining to $393,000,000 in 2026Q4; net income followed a similar pattern, rising from $386,000,000 in 2026Q1 to $462,000,000 in 2026Q3 before falling to $300,000,000 in 2026Q4.
The model rewarded the strong mid-year acceleration through 2026Q3, while the notable pullback in 2026Q4 for both operating and net income tempers the score, resulting in a high but not maximum momentum rating.
L3Harris had a dividend payout ratio of 56.2% in FY2026, measured as dividends paid relative to net income.
A payout ratio of 56.2% in FY2026 indicates that the company returns a meaningful share of earnings to shareholders while retaining a substantial portion, a balance the model rewards with a near-top dividend score.
L3Harris is assigned to the macro themes of Defense Spending and Space Economy.
Although the company is aligned with two actively tracked macro themes — Defense Spending and Space Economy — this assignment did not translate into a positive score under the model's current methodology.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
L3Harris Technologies demonstrates moderate but consistent growth, with revenue expanding 9.8% from FY2023 to FY2025 and diluted EPS rising 8.4% from FY2025 to FY2026, alongside a conservative balance sheet carrying a debt-to-equity ratio of 0.53 and total assets of $41.2 billion in FY2026. Profitability remains a relative soft spot, with return on assets of just 3.9% in FY2026, while quarterly momentum showed strong mid-year acceleration through 2026Q3 before a notable pullback in 2026Q4. The company's dividend payout ratio of 56.2% in FY2026 reflects a shareholder-friendly capital return posture, and its alignment with the Defense Spending and Space Economy themes positions it thematically, though that alignment did not contribute to the model score. Overall, the composite profile earns a Medium risk rating and a Research Further label.
Plain English
L3Harris is a large defense and space company that has been growing steadily, keeps its debt low, and pays out a solid dividend, but its profits relative to its huge asset base are modest and its earnings dipped sharply at the end of 2026, so it's worth looking into more before making any decisions.
Bull Case vs. Bear Case
Bull Case
- Revenue grew 9.8% from FY2023 to FY2025 and diluted EPS climbed 8.4% from FY2025 to FY2026, showing consistent top- and bottom-line expansion.
- A debt-to-equity ratio of 0.53 and a total asset base of $41.2 billion in FY2026 reflect a conservatively leveraged, large-scale enterprise with financial stability.
- A dividend payout ratio of 56.2% in FY2026 indicates the company returns a meaningful share of earnings to shareholders while still retaining capital for operations.
Bear Case
- Return on assets of only 3.9% in FY2026 suggests the company generates a relatively modest return on its very large asset base, pointing to below-average capital efficiency.
- Operating income dropped sharply from $621 million in 2026Q3 to $393 million in 2026Q4, and net income fell from $462 million to $300 million over the same period, raising questions about earnings sustainability.
- Despite alignment with the Defense Spending and Space Economy macro themes, this thematic positioning did not translate into a positive model score, limiting its composite rating.
What Could Change the Picture
Bullish Triggers
- A sustained recovery in operating and net income back toward or above 2026Q3 levels in subsequent quarters would signal that the 2026Q4 pullback was temporary rather than structural.
- Improvement in return on assets meaningfully above the current 3.9% would indicate better monetization of the company's $41.2 billion asset base.
Bearish Triggers
- If the 2026Q4 earnings decline proves to be the start of a sustained downtrend rather than a one-quarter dip, the momentum picture would deteriorate significantly.
- A rise in the debt-to-equity ratio well above the current 0.53 level would erode the conservative leverage profile that currently supports financial health.
Risk Profile
Medium RiskL3Harris carries a relatively conservative leverage profile with a debt-to-equity ratio of 0.53 and a substantial $41.2 billion asset base in FY2026, which limits balance-sheet risk; however, the sharp sequential decline in both operating income and net income in 2026Q4 introduces near-term earnings volatility that warrants monitoring.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.