Lockheed Martin awarded $214.36M Army contract
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Yahoo
3 hours ago
- Yahoo
1 No-Brainer Dividend Stock to Buy in July for Passive Income
Key Points Lockheed Martin has been lagging other major defense contractor stocks. It is taking action to address underperforming aspects of its business. The stock's valuation is compelling and the dividend yield is generous. 10 stocks we like better than Lockheed Martin › Lockheed Martin (NYSE: LMT) shares fell a whopping 10.8% this past Tuesday in response to the defense contractor's second-quarter 2025 earnings and updated guidance. Lockheed badly missed analyst earnings estimates for the quarter due to a flurry of (mostly) one-time charges. Despite the sell-off, here's why Lockheed is a no-brainer dividend stock to buy now. More losses for Lockheed Martin Lockheed reported pre-tax losses on programs of $1.6 billion and other charges of $169 million, which dragged down its earnings per share (EPS) by $5.83 -- leading to net EPS of just $1.46. If program losses sound familiar, that's because Lockheed reported a similar quarter in January, when the stock fell 9.2% in a single session after Lockheed incurred $1.72 billion in write-offs. The company does the vast majority of its business with the U.S. government, and to a lesser extent, approved allies. As such, investors can be left in the dark regarding classified national security programs. One-off charges usually don't impact a long-term investment thesis unless they signal prolonged challenges. Lockheed is testing investor patience because two out of its last three quarters drastically underperformed expectations due to one-off charges. In its second-quarter press release, Lockheed attributed the program losses to its new review process, which is causing the company to reevaluate legacy programs and address associated risks. However, Lockheed believes that the review process is a necessary step to improve execution. Results are still decent despite ongoing challenges Lockheed Martin is a stodgy company with long-term contracts spanning fighter jets and other aircraft, missiles, weapons, combat systems, helicopters, space systems (primarily satellites), and more. Not every program is a high-margin cash cow. And that's been known in Lockheed's results for a while, given its slow growth. So while its program losses jump out in headline EPS figures, they are really just symptoms of a bigger problem. Long-term investors would prefer a company address issues instead of letting them fester. But for now, Lockheed's stock is selling off while many of its peers are up big year to date and making all-time highs. To make matters worse, industrials have been the best-performing sector so far in 2025. Lockheed's underperformance in a hot sector is akin to a software company missing the boat on artificial intelligence. Earlier this year, Boeing beat Lockheed Martin for a major fighter jet contract that could be worth tens of billions of dollars over an extended period of time. Growth at Lockheed has stagnated, as evidenced by a paltry 12% increase in revenue in the last five years and lower operating margins. Meanwhile, its peer, RTX, continues to generate solid organic growth. Northrop Grumman just hit an all-time high after beating earnings expectations and raising its full-year guidance. It would be one thing if other major defense contractors were experiencing similar challenges as Lockheed, but this is far from the case. Lockheed isn't in a full-blown turnaround. Rather, it is addressing weaker areas of its business to return to growth. The good news is that Lockheed is maintaining its full-year 2025 guidance for sales, cash from operations, capital expenses, free cash flow (FCF), and share repurchases -- illustrating that these changes aren't impacting its long-term investments or plans to return capital to shareholders. Granted, Lockheed's low-single-digit revenue guidance and high-single-digit FCF guidance is far from exceptional. But it still has a healthy backlog to rely on to support its targets. A value stock with a high yield Lockheed isn't at the top of its game, but it is addressing program losses across its segments to improve its processes and operations going forward. In the meantime, the stock's dividend yield has pole-vaulted to the top of the industry. In fact, Lockheed is the only major defense contractor with a dividend yield above 2%. Lockheed's valuation will appear more expensive in the near term due to program losses dragging down EPS. But if the internal review leads to higher margins over time, the stock will look dirt cheap. Management is guiding for 2025 sales of $73.75 billion to $74.75 billion and free cash flow of $6.6 billion to $6.8 billion. Based on the midpoint of those forecasts, and Lockheed's market capitalization of $96.2 billion at the time of this writing, the company would have a price-to-sales ratio of just 1.3 and a price-to-FCF ratio of 14.4. For context, Lockheed's 10-year median is 1.7 for the P/S ratio and 19.2 for price-to-FCF ratio -- illustrating just how beaten-down the stock is right now. Lockheed arguably deserves to trade at a discount to its historical averages, given the company isn't delivering on shareholder expectations. However, the stock could be a great option for value investors who are willing to give the company time to recover. Lockheed is a buy for patient investors Unlike some one-off impairment charges, Lockheed's program charges are indicative of a larger issue at the company. Therefore, a sell-off was warranted. However, investing is more about where a company is going, rather than where it has been. And with Lockheed now beaten down, investors are getting an opportunity to scoop up shares at their lowest valuation in years. Lockheed's discounted valuation and 3.2% dividend yield make it one of the best choices in the defense industry for value investors looking to boost their passive income. The mounting program losses quantify the extent of issues at the company, but at least Lockheed is ripping off the proverbial bandage and reviewing these issues rather than letting them persist. Given Lockheed's diversified business model and strong cash flow, the stock appears to be a safe bet for income investors seeking to add stability to their passive income stream. Should you invest $1,000 in Lockheed Martin right now? Before you buy stock in Lockheed Martin, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Lockheed Martin wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends L3Harris Technologies. The Motley Fool recommends Lockheed Martin and RTX. The Motley Fool has a disclosure policy. 1 No-Brainer Dividend Stock to Buy in July for Passive Income was originally published by The Motley Fool
Yahoo
14 hours ago
- Yahoo
Why Oversold Lockheed Martin (LMT) Could Be a Defensive Dividend Powerhouse
Lockheed Martin Corporation (NYSE:LMT) is included among the 10 Oversold Dividend Stocks to Buy According to Hedge Funds. Two fighter jets in flight, highlighting the technology and experience of the companies combat aircraft. The company has long held a leading position in the US aerospace and defense sector. It supplies advanced technologies and services to the US Department of Defense, NASA, and various international government agencies. Its space division is one of the company's four key segments. For investors looking for a diversified and established aerospace company with ties to the growing space industry, Lockheed Martin may be a strong addition to their portfolio. Lockheed Martin Corporation (NYSE:LMT) maintained a strong cash position, reinforcing its appeal as a reliable dividend investment. In the most recent quarter, the company reported an operating cash flow of $201 million. It also returned $1.3 billion to investors through dividends and share repurchases. On June 26, Lockheed Martin Corporation (NYSE:LMT) declared a quarterly dividend of $3.30 per share, which was consistent with its previous dividend. The company has been rewarding shareholders with growing dividends for the past 22 years. The stock offers a dividend yield of 3.11%, as of July 25. While we acknowledge the potential of LMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: and Disclosure: None.
Newsweek
a day ago
- Newsweek
Major Russian Arms Buyer Chooses To Go American
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Vietnam will purchase helicopters from the United States for its police force, as Hanoi—historically reliant on Russian weaponry—deepens its partnership with Washington. A Reuters report also stated that Vietnam's Defense Ministry is negotiating with Lockheed Martin over the purchase of C-130 military transport aircraft. A spokesperson for the U.S. State Department referred Newsweek to the government of Vietnam regarding the Southeast Asian country's equipment procurement. The Vietnamese Ministry of Foreign Affairs did not immediately respond to a written request for comment. Why It Matters Vietnam and the United States—former adversaries during the Vietnam War, which ended in 1975—have been expanding their defense cooperation since Washington lifted its arms sales ban in 2016, after which Hanoi acquired U.S. coast guard vessels and training aircraft. Prior to its full-scale invasion of Ukraine in 2022, Russia was a major weapons supplier to Vietnam. However, the Southeast Asian country is now diversifying its arms sources and enhancing domestic weapons production, creating opportunities for American defense firms. Earlier in July, President Donald Trump announced a trade agreement with Vietnam, under which U.S. goods exported to the Vietnamese market will face zero tariffs. Choosing American defense equipment may also help narrow the U.S. trade deficit with Vietnam. What To Know Citing people with knowledge of the talks, Reuters reported on Thursday that Vietnam's Public Security Ministry has agreed to acquire two helicopters from Lockheed Martin as Vietnamese pilots have been training with the U.S. defense giant's S-92 helicopters. According to Lockheed Martin, this type of helicopter is capable of performing a range of missions, including offshore energy transport, search and rescue, and airline operations. A total of 28 countries operate the S-92 helicopter for both civilian and military purposes. An Alaska Air National Guard pilot is seen with a S-92 helicopter at Wiley Post–Will Rogers Memorial Airport in Utqiagvik, Alaska, on August 26, 2021. An Alaska Air National Guard pilot is seen with a S-92 helicopter at Wiley Post–Will Rogers Memorial Airport in Utqiagvik, Alaska, on August 26, 2021. U.S. Air National Guard/David Bedard In addition to the helicopter deal worth over $100 million, the report stated that Vietnam's Defense Ministry is negotiating with Lockheed Martin over the purchase of C-130 military transport aircraft—designed for airlift missions and currently operated by 23 countries. In response to a Newsweek request for comment, Lockheed Martin said questions regarding Vietnam's defense purchasing deliberations or decisions should be directed to the Vietnamese government. The U.S.-based defense analysis website 19FortyFive reported in April—citing sources—that Vietnam is expected to buy 24 F-16 fighter jets, also manufactured by Lockheed Martin, to supplement its combat aircraft fleet, which is composed mainly of Russian jets. What People Are Saying The U.S. Embassy in Vietnam commented: "The United States supports a strong, prosperous, and independent Vietnam that contributes to regional and international security; engages in mutually beneficial and balanced trade relations; respects human rights and the rule of law; and grows its economic cooperation with America to strengthen energy security, increase U.S. prosperity, increase cooperation in technology, and reinforce our shared commitment to a free and open Indo-Pacific." U.S. President Donald Trump announced on social media platform Truth Social on July 2: "Vietnam will do something that they have never done before, give the United States of America TOTAL ACCESS to their Markets for Trade. In other words, they will 'OPEN THEIR MARKET TO THE UNITED STATES,' meaning that, we will be able to sell our product into Vietnam at ZERO Tariff." What Happens Next It remains to be seen whether Vietnam will make additional purchases of military hardware, as it is involved in maritime disputes in the South China Sea with its neighbor, China.
