Here is the dividend forecast for Bae Systems shares for 2025 and 2026

Defense contractors such as BAE systems (LSE: Ba.) Often proves to be great dividends to maintain long term. This particular Ftse 100 The operator has increased its annual dividend every year since 2012.

Its long registration of payment growth reflects the leading position of the BAE market and the resistant nature of defense spending. The demand for related armament and hardware remains widely stable, regardless of the broader economic conditions.

In fact, the perspective for defense spending is stronger now than for decades. And so, the owners of the Footsie company can realistically expect that dividends continue to grow as sales (probably) are strengthened, at least in the short term.

Greater growth is expected

My optimistic opinion is shared by city analysts. As the following table shows, dividends in BAE systems are inclined to continue uploading until the end of 2026:

Encouragingly for investors, these dividend projections are also well covered by the expected profits during the period. So, even if the profits are discouraged, for example, due to the problems of the supply chain or project delivery problems, the company could be in good way to comply with the forecasts of the runners.

Dividend coverage sounds 2.1 times for each of the next two years, exceeding the minimum level widely considered 2 times that investors yearn. This should give the company the flexibility of complying with payment forecasts and at the same time continue investing for growth.

Strong foundations

That does not mean that I hope that profits disappoint in the coming years. Bae Systems' sales and operational profits increased by 14% and 4%, respectively, in 2024, to £ 26.3bn and £ 2.7 billion.

With a solid orders book, the company's order portfolio increased £ 8 billion last year, to £ 77.8 billion, the business also has a strong visibility of profits during the period.

In addition to this, the FTSE 100 company has considerable financial resources that may require to increase in line dividends with forecasts. The free cash flow remains strong and was an impressive £ 2.5 billion in 2025, helped by strong customers advances and an impressive conversion of operational cash.

The £ 1.5 billion shares repurchase program (which will be completed in 2026) underlines the robustness of its balance sheet.

A higher purchase?

The high price of Bae Systems shares has had a negative impact on the company's term dividends. During the next two years, they feel somehow below the average progress of FTSE 100 of 3.5%.

Even so, I believe that the perspective of rapid growth of inflation payments in the coming years makes the shares be the serious consideration of passive income.

There are dangers that the company can face later. Particularly worrying is the possibility that the defense expense of the United States falls under the impulse of efficiency of President Trump. The United States is the largest single market in the company.

But in general, I believe that Bae Systems' actions are an extremely attractive option for both growth and dividend investors, backed by the increase in defense spending of NATO Non -American countries.