Summary
- LMT is a major aerospace and defense company that is likely to be a major player in space exploration.
- LMT has a strong dividend that it increased for 16 consecutive years, and which is likely to continue increasing for years to come.
- LMT's F-35 program is ramping up well.
- LMT increased revenue and earnings estimates in April, unlike the rest of the market, which is lowering expectations.
- LMT is a long term hold.
Lockheed Martin Corporation (LMT) is a global security and aerospace company. The majority of Lockheed Martin's business is with the U.S. Department of Defense and other U.S. federal government agencies. Lockheed also owns Sikorsky, which sells helicopters and rotary-wing aircraft. The remaining portion of Lockheed Martin's business is comprised of missiles and fire control systems, as well as space launches and satellite systems.
Lockheed Martin is making money, returning money and increasing estimates
Last year, Lockheed Martin paid out $2.3 billion in the form of dividends and made $1.5 billion in share repurchases, including increased buying in the fourth quarter, when the market dropped. Lockheed essentially bought twice as much in the holiday quarter as it averaged during the first three quarters.
They continued to distribute cash and repurchase shares and last quarter too. Moreover, the dividend is less than half current free cash flow, and the dividend plus the repurchase plan combine to equal about two-thirds of free cash flow. This means Lockheed has a strong likelihood of being able to pay the dividend, and also continue to increase it.
