Harris Corp. (NYSE: HRS – $110.90) said it has been awarded a five-year, $500 million ceiling, single-award IDIQ contract from the National Geospatial-Intelligence Agency (NGA) to develop software that will enable NGA analysts and customers to search and retrieve data from intelligence systems faster and more efficiently than ever before. The contract was received during the third quarter of Harris’ fiscal 2017. The software will process content held within the NGA and other intelligence-community agencies and will allow intelligence officials to provide more timely and accurate support to warfighters and the national security community. Harris has partnered with the NGA for almost 20 years to provide automated geospatial data processing, content data management and geospatial systems design and development. Harris currently provides high-resolution geospatial data content and products under NGA’s Foundation GEOINT Content Management program.
I am optimistic that an increase in military spending will be beneficial to Harris. With the Trump Administration’s intentions to increase defense spending, Harris is well positioned to capitalize on bigger government budgets, particularly with its line of Falcon radios and other tactical equipment that are well suited for the military. Thus, I believe earnings will resume their growth trajectory in fiscal year 2018 ending in June following a bit of a pause this year. The shares also yield investors nearly 2% at current levels, and further dividend growth is in the cards.